Wednesday, June 24, 2009

Precious metal business

The grocery store seen in the video is what Americans call an "ethnic
market". America has a very large population of what are called
Hispanics or Latinos, mainly recent immigrants from Mexico and Central
America. These people don't shop at the regular grocery stores for white
people such as Safeway, Kroger, and regional chains like Raleys and
Ralphs. They have their own markets, and these markets are generally run
by small businessmen, and they have very little government interference
in how they run their business. As long as the taxes are paid, the
authorities are usually happy.

So we have these little markets (he used the term "mini-mart" in the
video, which you are likely unfamiliar with, but it's a small
neighborhood market) that cater to their own people, and they "fly under
the radar" as we say and the authorities are not very aware of them. Los
Angeles is majority Hispanic, so I would guess that little "cambio de
cheques" places like this are mainly a Southern California phenomenon.

For the time being, it is perfectly legal in America to sell your gold
and silver to a licensed jeweler, and the local jewelry stores are
running ads to buy gold and silver from people. One jewelry store here
in Sacramento in northern California even put up billboards asking for
gold and silver. There are smaller places, too, that buy and sell used
jewelry and coins, and they have jeweler's licenses which makes the
whole thing legal. But something like this in the video is definitely
new to the US, and not very widespread.

What likely will happen is that we will have many more "jewelers" whose
primary function is as a cambio, and they will open up in shopping areas
with markets and drugstores, and an American will exchange his silver
for (worthless) cash at a "jeweler", then walk next door and buy food
and medicine with the cash. American government is very bureaucratic,
and as long as the jeweler is legal and the market takes cash, it is all
fine by the authorities. I hope this clears some stuff up for you.


Hi Pezar, I'm familiar with the things you mention. Here we have chinese "minimarts" very similar to the ones you have by other ethnic groups. The are well received by the people and of course, they are run by chinese immigrants. We have the "bolitas" as well, Bolivinas leal immigrants but are held in somewhat similar regard as the Mexican illegal immigrants. Since they are willing to work almost for pennies, local workers dont like them that much, and unfortunately its also true many of tehm are involved in illegal activities.
It's sad to read about so many similarities between what you see now and what have become common for us now here in Argentina.
I remember telling people about the booming "I buy gold" signs. Expect them to becoem much more common, even people not directly related to jewelry jumping into that as well. Any small commerce in the downtown area can start doing it and making some money. Here the gold business went up 500% after the crisis.



Jedi said...

Another thing that is becoming more popular in the US are gold parties. I know two people who organize these types of parties in my area alone. According to them, they invite people(mostly women) to bring their gold to the party and get paid cash right there on the spot.

Since most party goers know next to nothing about gold and gold prices, they are thrilled when they receive $80-$200 for their old "junk" gold.

The party organizers are glad to pay the cash because they then turn around and sell the gold for close to its true market value, netting themselves a very nice profit.

Weaseldog said...

Ads like these are becoming common in the USA.

Anonymous said...

Ferfal, Have you heard of Maria Belen Chafur, the mistress of the Governor of South Carolina? Have you seen a picture of her? Are people in Argentina talking about this?

As for diff between USA and Argentina, all I can say is the USA has changed beyond recognition. When we were kids, 30+ years ago, life was so tame. You could go anywhere as a kid at any time and there was no danger (I'm talking about a mid size city in the Western USA) There was NO divorce (unheard of) no single moms (the rare single mom gave up the child for adoption) there was no welfare at all for single moms, virtually no illegal immigration, etc

I remember my brother, a historian, saying, people will look back at the 50's and early 60's as the calmest years ever.

So, yes, we are resembling more Argentina. However, the country used to be extremely honest, hard working, and calm.

Anonymous said...

Just in the last few days I have noticed real casas de cambio popping up in heavily Hispanic areas. I was in Stockton's Little Mexico a few days ago and I noticed a little storefront calling itself Oromax. It had a big sign out front saying WE BUY GOLD COMPRAMOS ORO. It didn't appear to be a market or drugstore or anything like that, just a counter and a few safes. It looked to me like a real Argentine style cambio.

So far I haven't noticed anything similar here in Sacramento. Stockton is about 50 miles south of Sacramento. I went out today looking for other cambios, and saw several "pawn shops" and of course the Asian jewelry stores, along with several jewelry store billboards saying we buy gold. I think that this fraying of the faith in the dollar is the real weak spot here, not necessarily external debt. Since nothing backs the dollar, all it will take is for people to stop using it and the government will go belly up.