The Dangers of Buying an Imported Burglary Safe

The Dangers of Buying an Imported Burglary Safe

In the world of burglary safes, Underwriters Laboratories (UL) TL-15 rated safes are the first rung of the commercial safe ladder.  They have been certified by UL to resist entry via the door for at least 15 minutes using hand-held power tools, drills, and pressure applying devices.  TL-15 burglary safes are serious pieces of equipment, with even the smallest unit rarely weighing less than 500 pounds.  Incorporating the latest anti-burglary technology, they are constructed of reinforced, high strength concrete mixed with ultra-hard carbide or ceramic nodules sandwiched between two layers of steel.

And yet all is not as it seems in safe-land, as exemplified by a rather disconcerting story.  A man purchased a used TL-15 rated jewelry safe cheaply, but found that the combination dial was binding.  After calling around to various locksmiths for repair quotes he decided fixing the safe wasn’t worthwhile.  So he conducted an experiment using commonly available hand tools – two pry bars and a sledgehammer – to break into his own TL-15 safe.  These are the sort of tools that you can find in garages all over the country.  No power tools were involved.

After a mere 20 to 25 minutes of prying, the novice safecracker had delaminated the boltwork from the composite door, allowing the safe door to pop open.  He then used a sledgehammer to test the body of the safe.  The allegedly high strength concrete fill disintegrated surprisingly quickly under this attack, fully yielding in about 10 minutes.  This safe performed terribly given its ostensible TL-15 rating.

UL employs the best safe crackers in the safe industry.  They work under ideal conditions and thoroughly review every safe’s schematics for weak points to exploit before testing.  Their testing time only includes the time that their tools are actually on the safe.  If they take a break, the testing clock stops.  If they get a glass of water, the testing clock stops.  If they go to the bathroom, the testing clock stops.  The idea that a first time safecracker could pick up some hand tools and pry open a TL-rated safe in a modest amount of time indicates that something was very, very wrong with that safe.

Successful pry or sledgehammer attacks against a TL-rated burglary safe should be almost impossible.  A TL-rated safe should be immune to almost any attack involving hand tools.  Even power tools will generally take much longer than the time rating on the safe.  It is not unusual for a seasoned safe-technician using carbide cutting discs to labor for one or two grueling hours to penetrate the side of a legitimate TL-15 rated safe.

So why did this particular TL-15 safe perform so poorly?  The answer, unfortunately, is because the safe was an import made in South Korea.  Most imported burglary safes are produced in three countries: China, South Korea or Mexico.  Lower labor costs in these countries allow imported burglary safes to sell at significantly lower price points than comparable U.S. made safes.  But factories in many emerging market countries rarely meet the stringent manufacturing tolerances commonly demanded in developed countries.

Chinese factories have been known to forge UL certifications and then export the resulting fraudulent products around the world.  Overseas factories also frequently cut corners by subtly changing key aspects of safe construction and design to save money.  For example, a design that stipulates continuous welds might instead be made using cheaper and weaker spot or skip welds.  In one egregious case, a foreign made TL-30 safe door was cut open for testing by a competitor only to have loose gravel and wood chips spill out!

Materials sourced in emerging markets are also often inferior.  A36 is the standard grade of steel used in burglary safe construction.  This type of steel has a minimum yield strength of 36,000 psi.  But that is only a lower bound; the actual quality of different batches of A36 steel can vary widely depending on where they are sourced.  A36 steel originating from emerging markets – and China in particular – will often be sub-par compared to domestically sourced material.  It’s highly probable that a safe made from Chinese steel will yield to a burglar’s attacks more readily than a similar safe made from American or European steel.

I would like to note one exception to the rule that imported burglary safes should be avoided.  AMSEC is a highly reputable safe manufacturer that has been in business since the late 1940s.  They source some of their lower priced models from China, but have the operational scale and integrity to demand that these foreign factories meet their strict quality control standards.  However, AMSEC’s high-end models with the tightest tolerances and highest security are still made in the U.S.

Safes manufactured in the U.S. are more expensive than imported burglary safes – sometimes significantly so.  This is because domestic safes are produced to tighter tolerances using higher quality materials.  This costs more, but results in a superior product that performs superbly when it counts.  When you buy an imported burglary safe you are rolling the dice.  A substantial number are outright counterfeits, or suffer from latent defects in design, materials or workmanship that are invisible to normal inspection.  An inferior safe only reveals its weaknesses in the wake of a burglary or fire, when it is far too late.

9.99 Troy Ounce Homestake Mining Company Vintage Poured Loaf Style Silver Bar Dated 1979

9.99 Troy Ounce Homestake Mining Company Vintage Poured Loaf Style Silver Bar Dated 1979
Photo Credit: Treasure-Island-Coins

9.99 Troy Ounce Homestake Mining Company Vintage Poured Loaf Style Silver Bar Dated 1979

Buy It Now Price: $950 (price as of 2016; item no longer available)

Pros:

-This is an almost 10 troy ounce vintage silver bar produced by the Homestake Mining Company in 1979.  The bar is hand poured in the traditional way from silver that is 99.9% pure.

-The Homestake Mining Company took its name from its famous namesake mine located in South Dakota.

-The Homestake Mine was one of the world’s most prolific and longest operating gold mines.  It produced an estimated 39.8 million troy ounces of gold and 9 million troy ounces of silver during its 123 years of operation, from 1878 to 2001.

-The Homestake Mining Company was listed on the New York Stock Exchange longer than any other company.  Shares were traded on that exchange from 1879 until the company was delisted after being acquired by Canadian gold producer Barrick Gold Corporation in 2002.

-This vintage silver bar is unusual because it is dated.  Most bullion bars produced are not dated.

-This old silver bar was fabricated during the infamous Silver Bubble of 1979/1980.  Two Texas oil billionaire’s – the Hunt brothers – attempt to corner the silver market, coupled with fears of imminent U.S. dollar hyperinflation, catapulted the price of silver to almost $50 a troy ounce (about $146 in inflation-adjusted 2016 dollars).

-This vintage silver bar’s chunky “loaf” shape, substantial size and wonderful patina give it a lot of eye appeal.  This eye appeal, along with the fact that it was produced by one of the world’s most famous mining companies at the height of the Silver Bubble make it a very desirable piece.

 

Cons:

-With silver currently trading at $19.68 per troy ounce, this Homestake Mining Company silver bar contains $196.60 worth of silver.  That means the $950 ask price is over 4.8 times its bullion value.  This is a massive premium for an old silver bar, but may be justified given its excellent pedigree and historical interest to collectors.

The Future Return Prospects of Investing in Art and Antiques

The Future Return Prospects of Investing in Art and Antiques

Investment-grade art and antiques have done tremendously well over the last 10 to 15 years.  The worst case scenario seems to have been about a doubling in value over that time – with many areas within the asset class tripling or even quadrupling.  But a classic mistake many investors make is projecting past returns forward indefinitely.  In other words, just because art and antiques have generated excellent returns over the past decade, it doesn’t mean they are destined to outperform over the next decade.  So what, if anything, are we able to divine about their future returns?  There are a few indicators that we can assess to give us a reasonable idea of their future performance.

First, I think it highly probable that precious metals – gold, silver and platinum – will be higher in the coming years.  This trend will be primarily driven by flight to safety demand caused by inevitable future financial sector disruptions.  Granted, this will only tangentially impact the pricing of antiques, specifically those that contain precious metals.  But it will be an important contributing factor nonetheless.

High-end raw materials are another element that is sure to become dearer in the future.  Honduran mahogany, Ceylon sapphire and British Columbian nephrite jade are just a few examples of the varied luxury raw materials often found in investment-grade objets d’art or antiques.  These materials – and many others as well – are simply not as readily available in good quality and sufficient quantity anymore.  The low hanging fruit – sources easily and cheaply exploited – has already been plucked clean long ago.  While I don’t think there will be widely publicized shortages of luxury good constituents per se, I do believe there will be a slowly growing realization among the knowledgeable that they are no longer abundant.  Consequently, one can expect the smart money to gradually begin accumulating art or antiques that use these materials, driving up prices in the process.

It is also obvious that the global economy is severely unbalanced in the current age.  At times like this I like to paraphrase U.S. economist Herbert Stein who said, “Trends that cannot continue, will not continue.” However, while a financial crisis usually ensues from a prolonged period of market distortion, it also true that there will always be a day after – a time when the global economy is on solid footing again.  When one invests in art and antiques, this is implicitly the scenario one is planning for – not the crisis, but the inevitable recovery.  When people have money to spend again, they will undoubtedly want beautiful, rare and artistic items.

The final aspect that bodes well for the outlook in the art and antiques market is the growing trend of automation.  In the future, factories will churn out massive amounts of consumer goods cheaply and quickly.  In addition, 3D printers will be found in almost every home.  Today’s ultra powerful computer processors are very good at mathematically intensive computations, but fail miserably at mimicking the human mind.  This shortcoming of computer AI is even more apparent in the artistic space.  As they are now, computers are simply incapable of conceiving of new ideas or amending existing concepts.  Therefore, it stands to reason that those things that computers can create will become common and affordable while those things that only skilled humans can make will become scarce and highly prized.  The creative endeavors of mankind will be revalued relative to everything else, which will just be “stuff.”

So even though the prices of art and antiques have already risen considerably, I believe it probable that this is just the start of a much broader trend.  Rare and highly sought after, art and antiques will be widely and avidly collected in the years to come.  The march of time will only serve to emphasize their positive qualities.  In my opinion, prices will rise for most, if not all, categories of this underappreciated asset class.

Luxury Goods Make the World Go ‘Round

Luxury Goods Make the World Go 'Round

It is a little known geopolitical reality that most exploration and trade throughout human history has been motivated by the desire to seek out and acquire luxury goods.  In the ancient world, the Roman Empire was famous for its extensive trade routes to the east.  These trade routes, including the legendary Silk Road, extended thousands of miles, finally terminating in Central Asia, India and perhaps even China.  Precious gemstones, spices, silk and incense were just a few of the luxuries that flowed through this complex, ancient trade network.  These exotic luxury goods were so coveted by the wealthy Roman elite of the day that many Roman writers commented disapprovingly on the massive drain of the Empire’s gold and silver from these eastern trade routes.

Another example of this phenomenon can be found over a thousand years later during the Age of Discovery, when European explorers first discovered and then colonized the Americas.  In 1492 Christopher Columbus set sail from Spain looking for the East Indies, a near mythical location rich with valuable spices like pepper, cinnamon, cloves and nutmeg.  These spices were in high demand in Europe and commanded huge sums of money, guaranteeing great wealth to whoever could supply them.  Columbus’ discovery that the New World lay between Europe and the Spice Islands was a rather unwelcome development.

Accident or not, it didn’t take long for the Spaniards to start exploring these new lands.  Sure, the Spanish conquistadors may have first marched into the unforgiving jungles of South and Central America for god and glory.  But they stayed for the gold, silver and emeralds they found which were exported back to Spain in massive quantities.  Over time, other luxuries came to be staple exports from the Colonial Americas as well – exotic timber for fine cabinetmaking, sugar for sweets, cocoa for the new European craze of chocolate and rum for wild parties.  This luxury driven trade helped create the modern, interconnected world that is now familiar to us.

The Victorian Colonial Age was also largely driven by the persistent demand for luxury goods and luxury raw materials from an increasingly affluent middle class.  Ivory from British Africa was used to craft the billiard balls found in every well-to-do Victorian home.  British South Africa supplied coveted diamonds for royalty, movie stars and commoners alike.  British Burma became the chief global source of high quality rubies and sapphires from the 19th century until World War II.  And the Americans didn’t force open feudal Japan in the mid 19th century because they wanted to be jerks, but because they desperately wanted to trade with the secluded island nation.  They wanted access to Japan’s acclaimed silks, lacquerware, porcelain and metalworking – all fine luxury items.

Even today the never ending chase for luxury goods forges and propels international relations.  China is renowned as a manufacturing center for many of our modern-day electronic luxuries – iPhones, iPads and MacBook Airs for example.  Understandably this means free-trade with China is a must for today’s wealthy developed nations.  The situation in Germany is similar.  Some of the world’s finest luxury cars are assembled and exported from Germany, making it another global trading powerhouse.

While the definition of what constitutes a luxury item has evolved over time, their centrality to international trade and even the flow of history is immutable – a fact that holds important lessons for investors today.  As long as people have disposable income, they will always seek out luxury goods to fulfill their desires.  In ancient times those luxuries were silks, spices and incense, while today we have new luxuries like portable electronics.  But some of the old standbys are still very much in demand – precious metals, gemstones and exotic woods – and these are all materials that are extensively used in investment grade art and antiques.  The savvy investor will take note.