Nov

19

Noticed Today, by Alan Millhone

November 19, 2009 |

PawnJust drove by a local pawn shop and the parking lot was full. I suspect some had guns pawned and need them now for hunting season. Many likely need money so they can feed the family for Thanksgiving. Some need cash for utilities or gas for their vehicles. I am sure these people could care less about the DOW today. Likely would sell their gold if they had any. Some will read my comments and smugly say those people should have prepared better or should not smoke or buy beer. I try not to judge anyone and strive to keep my own house in order.

Russell Sears remarks:

I bought a few items at a pawn shop Oklahoma last weekends and the parking lot was full, as were the registers. Some were at the gun counter, but others, like me, got some below melt-value deals on silver and gold jewelry and coins. The art work was picked over — little to be had. There were plenty of power tools and saddles to be had and not a browser near them. But all appeared to me to be buyers browsing for a discount, not sellers.


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1 Comment so far

  1. Don Chu on November 20, 2009 3:12 am

    Both Mr Millhone’s and Mr Sears’ remarks are revealing:

    “Am sure these people could care less about the DOW today. Likely would sell their gold if they had any.”
    “others like me got some below melt value deals on silver and gold in jewelery and coins. ”

    The secondary/buy-back market in gold, silver and jewelry had long been the domain of the neighbourhood jeweler and standalone pawnshop. But in the past year, some larger establishments have been muscling into the local scene:
    http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_421847.html

    ” The number of pawnshops here has grown 20 per cent since 2005 and in June numbered 122 stores, according to the Pawnbrokers’ Association. Some outlets compete for business in the same area - when Moneymax’s Toa Payoh store opens later this year, it will compete with both Maxi-Cash and SingPost in the neighbourhood.

    Both Soo Kee Group and Aspial pointed out that their jewelery and pawnbroking businesses are operated independently, and customers should not fear that pawned items might be ‘recycled’ through their retail jewelery stores.”

    Someone at the jewelers has apparently been keeping an eye on the diverging trends of the rising precious metal prices and dwindling cash assets of the working classes. This is one small business that seems mighty attractive right now: for want of a better term, socio-economic arbitrage.

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