Cliff Slater was right

Honolulu rail transit is going to be a disaster. It is no surprise that the cost overrun is already estimated at $500 million.

Still worse, Honolulu is thinking of plundering TheBus to cover TheRail. Honolulu once had a good bus service. No longer. And raiding the modernization fund will just destroy what’s left of it.

Extending the excise tax surcharge to forever for Oahu is also under consideration.

Expect someone in the Legislature to propose extending it to the Neighbor Islands.

Note to Joe Souki: Do not allow it.


New price: $500,000,200

New price: $500,000,200

Bad for Russia, good for gold

When asked about the direction gold will take, Big Rich always says, “It will go up, or it will go down, or it will stay the same.” Seldom does it do both so enthusiastically during one 24-hour period than it did Monday and today, however. As Bloomberg News reports:

Gold rebounded from yesterday’s biggest drop this year as investors sought a haven amid turmoil in emerging market economies and falling commodities.

Russia’s ruble plunged to a record low after the country’s largest interest-rate increase in 16 years failed to revive confidence in the currency. The Turkish lira also tumbled to an all-time low.

Your Christmas (or Hanukkah) present is you don’t have many Turkish lira. Lucky you.

(Silver did not get the same kind of love. When nervous people with money look for comfort, they don’t look to silver — usually.)

The New York Times has much more about why gold did the big turnaround. It’s the ruble. It was less than 20 years ago that Russia defaulted, bringing down Long-term Capital Management and its two Nobel prize-winning advisers who didn’t understand that things can change on a dime — or 10 kopecks.

The economic news had another victim not mentioned in the news reports: Obama haters. Remember how they were sure that Obama’s “soft power” tactics were making the United States a pitiful has-been? Well, the five countries that are subject to US (and to some extent international) economic sanctions are all on the verge of economic collapse: Russia, Iran, North Korea, Venezuela, Cuba.

It might not be a great idea to collapse countries with nuclear weapons, but the sanctions were meant to have an effect and they are having it.

As always, Kamaaina Loan is ready to buy or sell gold for you at whatever the day’s price is. We don’t care about the ruble.

#mauipawn #mauiretail





The people’s bankers

It has been 80 years since the Pecora hearings exposed how big banks work against the public interest. New Deal regulations limited some of the worst depredations and, most importantly, initiated the longest period in history without a financial panic.

Since 1980, the trend has been to regulate less and less, or not at all. In 2008 the country realized the benefits of that policy with a giant crash.

This week the Senate held a hearing on “regulatory capture,” which means the regulators get too cozy with the banks. The New York Times headlined:

New York Fed Chief Faces Withering Criticism at Senate Hearing

So that even what restraints on banks’ antisocial practices remain in law are nullified. One way that happens is through “revolving door” hiring of former regulators by banks they used to oversee, with expectable bad outcomes.

Pawn shops are regulated, too, but there is no revolving door between America’s 12,000 pawn shops and federal and state regulatory agencies.

Just sayin’.

Pawnbrokers are the people’s bankers.

#mauipawn #mauigold

‘Getting the chair,’ but in a good way

From Norwich, Conn., we learn of a pawnbroker who took the old advice and made lemonade from his lemons.

According to WTNH television, it began 5 years ago when Phil Pavone of A-Z Pawn bought a couple of motorized wheelchairs, expecting to resell them. They didn’t move, so he had another thought.

Kamaaina Loan blog called Pavone to get the rest of the story, with more perspective from pawnbroking operations than WTNH’s story provided:

It turns out, there’s more to creating a mobility project than taking in chairs by one door and handing them out at another. Pavone started by running newspaper ads, asking anyone with a disability to write or email him about their problem and how a chair would help.


He got 60 submissions.”I heard from people who had been homebound for years. . . .  You cannot believe how many flippin’ people fall between the cracks of eligibility. It’s a disaster.”

Pavone, a cancer survivor, says he understands what it means to be sick. He went out and bought four more chairs to give away.

From there, it grew, but not without a big push from him. “The most expensive part of the whole thing was getting the word out.” He advertised heavily in newspapers and on television for two years.

Now that he is established as “the go-to guy” in his area, the chairs come in to him as donations or inexpensive purchases. The program costs him around $10,000 a year.

A team of volunteers refurbishes the chairs, which usually amounts to no more than a new battery or a charger. A battery distributor provides batteries at cost.

Then he and his volunteers match the chair to the applicant: by weight (up to 250-300 pounds; or over 300); right or left-hand controls. Occasionally, a recipient will require a tilting chair to keep legs elevated.

“It’s not a tax writeoff,” says Pavone, who has two shops, one in Florida.”It’s about looking in the frickin’ mirror and liking what you see.”

He keeps his “Gift of Mobility” campaign going year-round. Sometimes he installs a chair in his shop with a placard, asking for donations of no-longer-needed chairs.

Then, about this time of year, he advertises for more stories. (He asks and gets special rates on this advertising.) His volunteers fix up the chairs and a few days before Christmas they lend pickup trucks to deliver chairs to recipients who cannot come to A-Z Pawn.

As of Veterans Day, he had “at least 40-45 chairs” to present, and another 11 or so being spruced up and probably to be ready by donation day (around Dec. 21).

You can learn more about Gift of Mobility, with links to Youtube videos of past campaigns, here.

#mauipawn #mauiretail


Crazy for love, maybe?



I think this guy wanted to be caught:

Police found that the suspect (in a burglary of a Black River Falls, Wis, pawn shop) cut himself on the broken glass and left blood evidence inside the store. Police collected samples of the blood and processed them as evidence, along with the pipe the suspect used to break in.

During the investigation, Black River Falls police developed information about an individual who had been involved in a domestic abuse case who fled on a bicycle outside of the City. It was believed that the same suspect, Colvin, might be involved in both incidents.

Black River Falls police worked with the Jackson County Sheriff’s Office and found Colvin at the Black River Falls Gaming Casino. Police said Colvin “was wearing a cluster of decorative rings on his fingers and had a fresh cut to his hand.” Colvin was taken into custody and medically treated for his cut hand.

And speaking of burglary, I was looking over the Maui police reports of stolen items taken in burglaries in October. (They give us the list in case someone wants to sell one, which happens but not often.)

It was a short list, which is good. But the number of items that the owner had kept a serial number for was even shorter: One.

Not all burglars are love-stricken mooncalfs who want to be punished like Shane Colvin of Black River Falls. (And that’s Shane Colvin not the singer Shawn Colvin, who in any case is a girl.) Most want to get away with your stuff, and you make their work easier and the police work harder by not recording serial numbers, and taking photographs and putting secret marks on your stuff.

Pawnbrokers do take “reported stolen” lists seriously because in many jurisdictions they take the loss if a stolen item is found in their inventory. But “two old silver coins” — which was on the Maui watch list in September — isn’t helpful.


#maui #mauiloan #mauigold

Wow! Sure didn’t see that coming

At the Kamaaina Loan blog we have been following with amusement and fascination the ups and downs of the gold price over the past few weeks. One minute the price jumps to $1250 and a day or two later it’s under $1200 and then back up again.

Sometimes the moves can be attributed to some pretty obvious doings in the world economy, sometimes the leaps and slides seem practically uncaused. But the price has gyrated around the $1225 that the gurus at Goldman Sachs last year were predicting for this period.

But who anticipated that late last week the Japanese central bank would decide to pump a lot of yen into the deflated Japanese economy, the latest in a series of failed attempts to bring that sector out of deflation? (Although the US Federal Reserve and many other wise heads have been worrying for years about inflation, deflation is the big problem. Economists know how to control inflation but — as the experience of Japan over the past 25 years and of the whole world economy in the ’30s demonstrated — deflation is the really intractable problem.)

The American stock market went crazy, with the Dow Jones Industrial Average spiking to a record high. Just why the transfer of ownership of a small fraction of Japanese equities from private (mostly Japanese) hands to Japan government hands should make American stocks so much more valuable is hard to figure.

But the effect on gold and its poor stepsister silver — once the stock market had reacted — was in line with conventional thinking: both fell off a cliff.

Gold got down to a four-year low and shortly before the market reopened today buyers were offering a mere $1172. Silver cratered. It has been a long while since it broke under $17. Today it is flirting with $15.

#mauipawn #mauigold #mauiretail

Gold gyrates

The price of gold changes every day, sometimes by quite a lot — a $25-an-ounce move is not unusual. But it doesn’t usually vary so much within a day that Kamaaina Loan has to adjust the amount it offers on gold loans or purchases.

Today, as gold continues a strange series of gyrations, a midday adjustment began to look like a good idea. (In the end, we didn’t change, though it might have cost us a few bucks.)

As our day began, gold was selling at just under $1227 an ounce.So that’sd where we pegged our offers for this day. Within less than 2 hours, it was down to $1209. It got as low as $1207 before rallying to around $1211 just before the market closed in New York City (which happens just after 11 a.m.Hawaii time).

The folks at Kitco, who offer a daily smorgasbord of gold news and opinion, thought the move — the biggest in 3 weeks — was an unhappy reaction to the release of the minutes of the Federal Open Market Committee. Kitco thinks gold traders think higher interest rates will be bad for gold (although, amusingly, you can find every shade of opinion on their website), for reasons that are opaque to us in the pawnshop.

Still, it has been a more than usually exciting couple of weeks for people who watch gold prices. As Big Rich always says, “Gold will go up, or it will go down, or it will stay the same.”


So, what did gold do today?


Not much,.

Yesterday, Kamaaina Loan blog wondered if gold would track the stock market, which in theory it sort of does — gold up when stocks fall and vice versa.

Over the past couple years,. stocks have reached record highs and gold has taken a swan dive, off around 30%. But is the relationship real?

Recently, the stock market has been gyrating like a yo-yo, and gold prices have risen and fallen, but not so violently.

So, if we understood what is going on, we wouldn’t have to work so hard in the pawn business and could lie on the beach all day. But we don’t.

Tuesday,. stocks were way up: the Dow was up 1.12%, the S&P 500 1.19% and the Nasdaq 1.75%. Those are all big movements for a single trading day, especially the Nasdaq.

What did gold do? It went up, by 0.22%. Not down. And when the spot market reopened, after the stock exchanges were closed and the traders had had a chance to digest the mood, gold did go down, but by a mere 0.02% (only 30 cents on a quote of $1227.50, barely noticeable).

Well, to heck with it, we’re off to the beach anyway.

#Mauipawn #mauigold #mauiretail

What does Ron Paul think about gold?

He likes it. We do, too, but possibly not for the same reasons.

this two.jpg

Although it has been getting almost no attention in the United States, Switzerland, home of one of the solidest currencies in the world, is going to vote in a month on whether to add more gold to its money.

In an interview with Kitco News, the retired gold bug and congressman Paul says he thinks the move should pass but won’t. If it did pass, the Swiss central bank would have to buy about 1,500 tons more gold to get its gold reserves up to 20% of paper francs.

That’s about 60% of annual production, though something less than 1% of all the gold humans have accumulated over the millenia. That much additional demand would, presumably, push the world price of gold up, although gold has been gyrating so much this month that it might be hard to tell.

(In round terms, gold dipped under $1200, rose to above $1250 when stocks went down, then fell below $1230 when stocks went up. Stocks didn’t go much of anyplace today, so it will be interesting to see whether gold, also, noodles around Tuesday.

Paul, of course, is the most prominent political voice for the idea that “fiat money” (money backed only by the prospects of the economy of the nation issuing it) is inherently unstable and likely to go “Poof!”

“When our crisis hit there was panic and people were scared to death. Even conservatives who didn’t believe in bailing out the banks were frightened into it,” he said. “But if you had a clean vote and just simply ask the question: ‘should Switzerland hold its own gold … should the central bank hold a certain amount of gold in reserves.’ I think you would get an overwhelming ‘yes.’”

Switzerland keeps 30% of its gold (some of which really should belong to murdered Jews, whose gold the Nazis let Switzerland keep for them in the ’40s) in England and Canada. (More gold is in New York City than Ft. Knox, and much of it belongs to other countries who do not trust their neighbors to keep their hands off their gold. That is, unless, you subscribe to the belief that all the gold has been taken out of Ft. Knox and put somewhere else. Where else? Who knows?)

You know who worries that the gold is not in Ft; Knox?

Ron Paul.

So now you know why he thinks the Swiss should worry about where their gold is.

If you pawn your gold with us, be assured it will stay in a bonded, insured vault and it will be there when you come to reclaim it. Kamaaina Loan And Cash For Gold: safer than Fort Knox!


Slow motion stock market crash

The graceful swan dive by Wall Street — the DJIA managed to get under 15,000 today before closing at 16,141, about a thousand below where it was just a couple weeks ago — merits some comment:

Listen up, people. Inflation is whipped. Beat, over and done with. Deflation is the problem, the hardest of all possible economic crises to manage your way out of. (The famous hyperinflation in Germany was controlled rather easily by replacing all the money with “Rentenmarks,” though the damage done was irreversible.)

Some people just won’t believe it. According to Bloomberg News:

Investors who poured more than $1 billion this year into a $3.8 billion leveraged exchange-traded fund that bets against long-dated U.S. Treasuries are suffering a 4.1 percent loss today alone, Bloomberg data show. The fund is down 38 percent this year, a small window into the magnitude of pain in a market where many traders have been wagering debt prices would fall.

Gold, at last, finally woke up to the fact that securities are tanking and started playing its accustomed role as refuge when people are worried.  Gold, after managing to get below $1200 an ounce, was up to $1241 today. Not fabulous compared to where it has been over the last couple of years but reversing a slide that has been going on almost all year.

More from Bloomberg:

“The markets are clearly very jittery,” said Larry Milstein, managing director in New York of government-debt trading at R.W. Pressprich & Co. “It’s not just the global slowdown.”

While Wall Street economists may be sticking to their forecasts Treasuries will lose value, a lot of bond buyers aren’t listening right now. And the bears are suffering the consequences.

Worse off maybe than bond traders is Vladimir Putin. A different Bloomberg story says:


 Oil has been the key to Putin’s grip on power since he took over from Boris Yeltsin in 2000, fueling a booming economy that grew 7 percent on average from 2000 to 2008.

Now, with economic growth slipping close to zero, Russia is reeling from sanctions by the U.S. and the European Union over its land grab in Ukraine, and from a ruble at a record low. Putin, whose popularity has been more than 80 percent in polls since the annexation of the Crimean Peninsula in March, may have less money to raise state pensions and wages, while companies hit by the sanctions also seek state aid to maintain spending.

“His ratings remain high but for a person conducting such a risky policy, Putin has to understand the limits of patience for the people, business and political elite,” said Olga Kryshtanovskaya, a sociologist studying the country’s elite at the Russian Academy of Sciences in Moscow. “Putin is thinking hard how not to lose face while maintaining his support.”

Couldn’t happen to a nicer fellow, either.