Rings and Romance

One visit to London’s Victoria and Albert Museum will underscore the fact that rings have been worn for more than 5,000 years; but the question of how they came to be connected to love and marriage is difficult to answer.  Tantalizing evidence from ancient Rome makes it clear that rings were being given as tokens of love before the birth of Christ; and we know that the custom was continued into the Christian era.  Their intrinsic value must have appreciable enough to make them inaccessible to the very poor; and this so disturbed the Bishop of Hippo (later canonized St. Augustine) that he urged priests under his rule to refrain from requiring wedding rings.  But despite the good St. Augustine’s concerns the custom of giving rings continued in the Roman Empire until both of its halves collapsed.  Interestingly enough, the 7th century bishop of Seville observed that the ring was given as a symbol of the marriage vows “to join their hearts to this pledge” and was to be worn on (presumably) the finger we see as the ring finger “because a certain vein is said to flow from thence to the heart.”  As the Dark Ages fell upon Europe, however, most of the wedding traditions the bishop had observed soon disappeared and would not reappear until the Renaissance.  Royalty led the way.

In the last quarter of the fifteenth century Charles the Bold ruled a rich combination of territories that are now parts of northern France, the Netherlands and Belgium but were then known, collectively, as ‘Burgundy.”  When he lost his life in battle in January, 1477, he left behind a single heir, Mary; and in the paternalistic world of fifteenth century Europe, she was vulnerable.  Burgundy’s wealth was great, so suitors abounded.   Needless to say, marriage could be either her salvation or her punishment.  Her subjects underscored this by demanding that she forego some of the governing powers she had inherited.  She yielded, conscious that if she did not, her subjects might well fail to support her if Burgundy were invaded by France.   England’s Duke of Clarence (later beheaded for treason) was interested and Louis XI, King of France, was urging her to marry Charles, his 7 year old son and heir presumptive; but In 1476, her father had arranged for Mary, to be betrothed to Maximilian of Habsburg and Mary’s step mother, Margaret, counseled her to honor the contract.  It made political sense; and the 18 year old Maximilian was enough acute to the importance of their marital and political union that he signified its importance by giving Mary the first ‘modern’ diamond wedding ring.  Paintings from the period depict the diamond he gave her as a ‘point cut’; that is, it looked like a polished pyramid, the product of an advancement in diamond cutting that had taken place late in the previous century.   

Max meant well, but like many who think they know it all, he was behind the times; the diamond he had given her was ‘old fashioned’.   It had become possible to cut diamonds to more ‘sparkly’ gems of shapes not terribly different from those we know today.   Louis van Berquem, one of Charles the Bold’s subjects, had revolutionized diamond cutting two years earlier.  He had invented the ancestor of all of today’s diamond polishing wheels; and Charles, recognizing the importance of this technological advancement, had awarded him three thousand gold ducats and become his patron.  Had she lived, Mary might have had a nicer diamond; but she died after being thrown from a horse less than five years later.

Of course, the combination of Louis’ advanced diamond cutting techniques and the social statement made by Maximilian’s gift made Europe’s aristocrats eager to own and give diamond rings and jewelry themselves; and the fact that common folk couldn’t afford them made them all the more attractive.  Thus for around four hundred years diamonds were mostly reserved to the very few; then the Industrial Revolution and the discovery of diamonds in Africa changed that.  The spread of wealth in western Europe and the United States, occasioned by the Industrial Revolution, put jewelry within the reach of far more people than ever before - and a wedding ring of precious metal became part of most weddings.   Diamonds became affordable for many after 1869 when they were found, in quantities unknown before, in Africa.  Inevitably, therefore, more than a few of the wedding rings  crafted and given since that time have been set with diamonds.  Now the newly well to do of the  ‘BRICs’ (Brazil, Russia, India and China) are demanding more diamonds than ever before; and the diamond ring has become part of romance on the world stage.  The only downside to this is that the supply of diamonds is stagnant; so demand, the invisible hand of the market, has caused the prices for diamonds (already more than 100 times more valuable than gold by weight) to increase significantly over the last few years. 

If you’re in the market for a diamond ring to express your love, now is the right time to buy; and we will help.  Here at Hursts’ Berwyn Jewelers we know diamonds; so unlike Max, you we won’t let you be caught a little behind the times.  Check us out on line at hurstsberwynjewelers.com; then phone us at 708.788.0880 for an appointment to select what may well be the gift of a lifetime.  We’re not the common jeweler; so come see us.

The Pasta Standard

 Often, those of our fellow citizens who have speculated in gold have done so out of fear that the U.S. dollar will collapse in value.   Their belief seems focused around the character of the dollar, fiat currency backed only by the promises of our government.   They see the course of government spending over the last thirty years or so as dooming the value of the dollar.  This may well be so; but it brings to mind the story of a gambler in the old west who stormed out of a gambling house raging, “The game is fixed!”.   Fixed or not, however, two nights later a friend spied him back in the gambling house.  Curious, the friend approached the gambler and asked, “Don’t you think the game is rigged?”  The gambler shrugged his shoulders and replied, “Oh, it is; but it’s the only game in town.”  The Chinese, of course, know that the size of the American economy makes the U.S. China’s most valuable trading partner; so their government ignores the price of gold, cheerfully accepts our dollars and continues to export to us. 

Ours, after all, is the world’s largest economy; and while the dollar may not be the only game in town, it is so important a part of the world’s economy (not just in trade, but in widely held U.S. money, bonds, stocks and other assets) that if the dollar tumbles in value all other currencies (they’re fiat currencies as well) must also fall in value.  In these circumstances, the most holding gold as an asset can do for its owner is to maintain his wealth; but what if there is no catastrophic failure of the dollar?  Certainly, it is in the profound interest of the the U.S. Government to guard against this to preserve its credit; and the looming debate in Congress over future spending and taxation gives clear evidence that our usually inept, contentious and lackadaisical legislature is aware (if not seriously alert) to this.  This spells out the gold speculator’s risk.  Gold is a non-performing asset.  Unlike dividend paying shares of stock in a corporation, gold’s value is locked into its sale.  You can make no money, if money is to be made, until you sell it; which brings us to the crux of the problem for those speculating in gold.  The speculator needs to know when to fold his hand; and those who did not when gold was higher this year face holding a losing hand (as I write, gold is down 20% from its high this year).

In the past (normal times in my view) 80% of the world’s gold supply has gone into either jewelry or (mostly east of Suez) been hoarded.  But these are not normal times.  On the world stage spikes in gold’s price are largely supported by the mercurial plays of speculators managing very large money funds.  It seems that when they need to prop up the apparent profitability of their fund they’ve gotten into the habit of buying gold.  Because the funds are so large, their increased demand drives its price up and allows them to show their investors an increased profit, albeit paper, at the end of a quarter.   That’s not to say that there has not been some real new demand for gold, it exists in the Chinese market.  China’s new economy has enabled China to become a major consumer of gold; but here the key word is ‘consumer’.  Like the people of India, China’s new gold buyers tend to buy it and hold it.  The reasons for this behavior are more cultural than anything else; but they have created a new ‘floor’ for the price of gold.  Unfortunately, at this moment no one knows what the dollar value of that ‘floor’ may be; so this new demand has created an opportunity for speculation.   While this seems to leave the question of the dollar’s vulnerability still open for discussion, that value has to be considered in the context of the spread of wealth to other parts of the globe.  Indeed, Indian gold merchants are currently horrified that gold sales are off by more than 28% when compared year to year.  As a word to the wise, the Rupee has collapsed while the dollar retained its value.

The world we live in is economically interconnected; and as recent events in the U.S. and Europe have demonstrated, their affects on our economy are unpredictable.  Let us go to the obvious however, this interconnection means that a collapse of the dollar would certainly be contrary to the general interests of those holding any dollars or dollar denoted financial instruments public or private.   So who does benefit from the current volatility of gold prices?  Obviously, those who are smart enough, or lucky enough, to sell on the metal’s ‘highs’ - the successful gamblers.   But as with any bubble, when speculative demand collapses, the price of gold must collapse to some value that gold users can accept; and those who have not unloaded their high priced gold must suffer.  Fortunately I have an answer for those who wish to guard against the devaluation of their gold - Pasta!  

Speculators arise!  Pasta is your future!  Unlike gold, pasta can be consumed and yield some nutritional benefit to the consumer.  What is more, wheat harvested and stored in the ancient Middle East (but discovered in our own time) has been found to be “alive”; so in as much as pasta (carefully stored) can easily outlive any one of us, it has lasting value at least as great as that of gold.  Not only that, pasta has world wide acceptance that is, in the ultimate, greater than that of gold (Ask a starving man anywhere on Earth if he wants a bar of gold or a bowl of pasta).  In fact, in a world with shrinking water resources, it is clear to me that in the foreseeable future pasta must out perform gold as an investment.  You heard it here first.

For a more solid investment than most, one with immediate rewards, you can invest in your personal relationships with a durable gift of beauty - a fine diamond. There is no better way to say ‘I love you’ than with a beautiful diamond; and I hand select each one that we sell for outstanding beauty.  So checkout our website, hurstsberwynjewelers.com; then phone us at 708.788.0880 for an appointment to select a piece of beauty.  We’re Hursts’ Berwyn Jewelers, not the common jeweler.