VOL. 13, #4, Winter, 1995

Sapphires: The Prince of Gems, International Market Updates: Diamonds, Thailand, Sri Lanka, Africa, Japan, Burma, Colombia, Brazil, Collector Gem Mining Info, WARNING: Canadian Scams, Privacy Section: Money Update, National ID Card Update/Harris Poll

  Dec 28, 1995   admin



by Robert Genis

The English word sapphire comes from saphirus in Latin, safir in Arabic, sappheiros in Greek, and sauriatna in Sanskrit. All of these words mean blue. Many people believe that all sapphires are only blue. Of course this is not true. Sapphire comes in pink, yellow, orange, green, gray, white, peach, teal, lavender, and even color change as well as numerous combinations. Of course, if a sapphire is red, it is a ruby.

Before gemology became a science, stones were grouped according to color. For example, all red stones (ruby, spinel, and garnet) were called carbuncles, which meant, "the color of glowing embers." Likewise, most of the blue sapphires in the Bible and old writings were not sapphires at all, but rather lapis lazuli, which was a common gem in Afghanistan.

In 1802, France's Count de Bouron discovered that sapphire and ruby were different colors of aluminum oxide of corundum. He utilized specific gravity, hardness, and chemical analysis. His findings shocked the gem world.

The majority of atoms in sapphire are aluminum and oxygen or iron atoms. One or two titanium atoms is all that is needed to create the blue color in sapphire. When a crystal has both titanium and iron, only then does it create the beautiful blue of sapphire. Ruby and sapphire are both ultra hard at 9 on the Mohs scale. Sapphires have a relatively high refractive index, which provides sparkle and brilliance. Due to sapphires cleavage they resist breakage.

Gem Island
In 850 A. D., an Arab writer wrote, "In the mountains there precious stones are found of various colors, red, green and yellow, most of which are washed from caverns or crevices by rains and torrents." Of course, he was writing about Sri Lanka. Before being renamed after independence from the British, the island was known as Ceylon. Many gem dealers still use this name. Before that, the island was known as Serendip. The geological reason for all the gems in Sri Lanka is the central mountains of the island. They reach a mile and a half high. Over time, when it rains, gemstones wash in all directions towards the sea. Today, all mining is done by hand, which is the law so that the government can extend the life of the mines. Sapphires are most commonly found in rice fields near streams in low, flat lands.

Burma is undoubtedly one of the most well known gem names in the world. Dealers and collectors both love Burma sapphire. The Mogok mines of Burma have been mined for probably 1,000 years. Burma ruby, sapphire, and spinel are the world standard. All stones originally mined in Burma were decreed to belong to the King of Burma. Along with Sri Lanka, during the Middle Ages, Burma started selling its ruby, sapphire, and spinel to India. Buyers noticed a difference even back then. According to ancient writings, the Sri Lankan sapphire was larger and lighter. The Burma sapphires were described as "possessing a steel blue fire." In 1865, the British took over Burma. The recent military government has taken over Burma, and renamed it Myanmar. Today, Burma sapphire occupies an exalted, almost mythical place in the gem world. As a general rule, you are looking for a milk-of-magnesia electric blue. Fine Burma sapphire presently trades for a 100% premium over sapphires from other locales. Add another 30% for no heat. Burma sapphire is calculated to be 100x rarer than Burma ruby, and is available for 1/4 of the price. Burma sapphire has almost perfect color, extreme rarity, and an inconsistent supply. Most of the miners who were working Mogok have left and are now working the new Mong Hsu ruby mine. Many collectors contend that Burmas will eventually reach price parity with the Kashmir gems, and are buying whatever is available.

Today, Kashmir sapphires remain at the top of the gemstone hierarchy. The blue they possess is rich, velvety, and serenely soft. Originally discovered in 1882, the stones were so plentiful the locals would use them as flint stones. By 1925, the mines were nearly depleted. Kashmir is a mountainous region in northern India. Due to its beauty and towering mountain ranges, it is often called the "Switzerland of India". Much of the minor production today is smuggled out. The region is so inaccessible that it can only be reached by foot or mule. Mining is sporadic and only attempted for a few weeks in the summer. In the winter, temperatures can fall below -45 degrees F, and blizzards can last for weeks. These stones are so rare, only a few may be available at any one time. Today, you can easily spend $5000-$10,000 for a carat size gem, $10,000-$15,000 for a two carater. Larger stones can go up to $50,000-$60,000 per carat. Kashmirs are known for their soft blues. This is due to the presence of rutile needles. Kashmir sapphires trade for 100% premium over sapphires from other locales. Add another 30% for no heat. Any Kashmir sapphire should come with an AGL or Gubelin certificate stating the country of origin and heat treatment.

Fancy Sapphire
Although most people tend to think as sapphire as being blue, actually sapphire comes in a wide variety of colors. They range in hues from orangy-pink-salmon, pink, orange, golden, purple, yellow, color change, green, and white . The major source for these gems are Sri Lanka, Thailand, and Burma, Australia, East Africa, and even Montana in the United States.

The rarest and most valuable collector fancy sapphire is the padparadscha,which is Sinhalese for "lotus flower". This gem is occasionally found in Sri Lanka. The color can best be described as a light pink-orange. A gem padparadscha will range between $5000-$10,000 per carat. Large padparadschas can exceed these prices. Some unscrupulous dealers have been selling some of the new African fancy sapphires as padparadscha. However, these stones have too much orange-brown to be properly labeled as padparadscha.

The second most valuable sapphire is the electric pink. The best of these stones have a pure vibrant color without violet or purple. What makes these stones exceptional is an electric intensity and a tone that pushes it way above a pastel color. Although technically classified as pink sapphires in America, some cultures, such as the Japanese and certain European countries, buy and sell these stones as "Burma rubies". This makes it very difficult for US collectors. The main sources of these gems are Burma and Sri Lanka. Commercial quality pinks sell from $500-$1500 per carat. Gem pinks sell from $1500-$3000 per carat. Large multi-carat sized pinks can exceed $4000 per carat.

Yellow and golden sapphires are an interesting gem to collect for collectors on a moderate budget. These stones should look like a canary diamond; bright, vibrant goldens and electric orangy yellows. They should not look pastel. You should not have to use your imagination to see the yellow, even though the unheated yellows tend to be lighter in color and tone. Sometimes collectors may find a non-heated stone from Africa or Srl Lanka. These gems are relatively unknown by "the public". Many collectors believe that once they receive more exposure, they will be a favorite among connoisseurs. Yellow sapphire is available for $350-$600 per carat in two to five carat ranges. Ten carat sized stones can reach $850 per carat. Goldens are available for $450-$700 per carat for two to five carat sized gems. Large goldens can reach $1000 per carat for ten carat sizes.

Sapphires are also discovered purple. Some exceptional purples are found in Africa. They are often described as intense cherry-orchid purple. Exceptional one carat purples range from $375-$475 per carat. Two to five carats can reach $750-$1000 per carat.

For the collector who cannot afford an alexandrite, Africa also mines a color change sapphire. They tend to go from a grayish blue in daylight to a cranberry red in incandescent light. These stones are hot collector items.

Finally, green sapphire is a relatively abundant stone. They usually have black or gray secondary colors and sell below $50 per carat.

Blue Color Saturation Caveat
In a nutshell, the higher percentage of blue in a blue sapphire, the more valuable the stone. Color purity and saturation are the keys to value. Often you hear, "the darker the color the better". This is wrong. The dealers in Thailand have so much low grade Australian blue material, that they figured the only way to sell these goods was to repeat this lie. Inky black sapphires are a curse, and are not worth more than $10-20 per carat. Sapphires should be a rich, pure blue, not black/blue.

Approximately 90-95% of all sapphire is heated. Gems have been heated for over 4000 years. Indian gem dealers discovered gems improved with fire. The old method, which is still used today, involves putting rough or finished gems in a crucible. This process involves no science, gauges, meters, timing, or control. Basically, the stones are put inside a steel drum. The drum is open at the top. Fire bricks line the bottom of the tank, leaving a circular opening from top to bottom. The fire is ignited with kindling and charcoal, then the crucible is inserted. The stones are cooked overnight. Other cookers utilize electronic furnaces and computers. They use chemistry, engineering, physics, and magic. They bathe the gems in oxygen, hydrogen, and cycle the gems with precise digital increments. Every cooker has his own theories and secrets. By using this alchemy, they make brownish sapphires blue and black sapphires blue.

One thing to remember is that heating sapphire is a permanent process. Sapphires have all the right internal chemistry inherent in the crystals. They just were not in the earth's surface long enough, or were not located in exactly the right hot spot of the earth's crust to arrange the atoms properly. Heating only rearranges the atoms, it does not add or subtract atoms. Some yellow, golden, and orange sapphires are irradiated. This is not acceptable. The simple way to detect this is what is called a fade test. Simply place your stone in the sun for a few days. If it fades, it is irradiated.

Every serious collector should own at least one blue sapphire. Many start with Sri Lankan gems and work their way up to Burmas and Kashmirs. Sapphires are inexpensive compared to diamonds, rubies, and emeralds. A one carat D-IF diamond can sell for $15,000 per carat. A 3.5 unheated Burma Mogok ruby can sell for $20,000 per carat or more. A 3.5 Colombian emerald can also exceed $20,000 per carat. Fine one carat Sri Lankan sapphires, as a general guideline, can range from $2000-$4000 per carat. Similar Burmas can range from $3000-$6000 per carat. Kashmirs can easily sell for $5000 to $10,000 per carat. Are sapphires expensive? Yes, but compared to the BIG THREE, they are rarer and a bargain. If you are on a budget, you can also collect fancy sapphires. The range of prices and available colors meet most budgets.

Unlike cars that rust, furs that deteriorate, and buildings that crumble, gem crystals are permanent and will be here after the sun burns out. Never forget what a famous gem dealer once said, "We only borrow these beautiful things. Crystals last forever...and pass from one life to another."



Shortages & Price Increases
There remains a tremendous shortage of 3/4 to 2 carat GIA graded diamonds. Buyers are looking for diamonds without any cut problems. The primary shortage is in E-J color and VS1-SI2 clarity. Diamond dealers are having trouble finding any stones to quote to customers. Prices are firm for 1.25-1.75 fancy cut diamonds, especially marquise cuts.

DeBeers announced a 5% diamond price increase for large, high quality diamonds. DeBeers said it was responding to increased demand for diamonds in North America, Europe, and Japan. Dealers suspect the move was partially done to satisfy the Russians, who want to sell their diamonds independently. DeBeers is trying to renew its five year pact with Russia.

Diamond production rose from 100.8 million carts in 1993 to 107.5 million carats in 1994. Australia led the production with 43.8 million carats. Of course, Australia primarily produces low quality melee (small stones). Just about every diamond producer increased production except Russia, which stayed the same. Russia is still second in production with 25% of the world diamond market.

Argyle Pinks
Argyle Diamonds of Australia sold this year's entire production of 45 carats of pink diamonds for $4.15 million. Buyers from the Far East, Japan, and Europe purchased the majority of the collection. The most sought after stones had grading reports designating them as fancy intense purplish-pink. The main diamonds of the collection were a 2.8 emerald cut and a 1.05 round.


Ruby And Sapphire
The market is slow and brokers are complaining. Japanese buyers are no longer coming to Bangkok. However, prices are up 10% for fine ruby and sapphire. Commercial quality gems are the same. Exports of colored stones have plunged 22% for the first four months of 1995. Low end manufacturing has moved to India and Sri Lanka. A new 7% VAT which is levied every time a gem changes hands is depressing the industry. A thousand Thai workers have been laid off.


Availability of Ceylon sapphire is down tremendously. Yellow sapphire is up 40% due to a new heating process. The cookers have figured a way to take the unheated yellows and turn them into golden/oranges. Once heated, the stones are sold wholesale in the Far East for $600 per carat. Fine pink sapphire and blue sapphire is scarce. Dealers are traveling to Japan, US, and Europe to market these goods at higher prices.

Civil War
In October, Tamil guerrillas killed 19 Sinhalese civilians. According to witnesses, "The villagers were killed like dogs with machetes." In November, thousands of soldiers recaptured Jaffna city, the rebel stronghold, for the first time in five years. The Sinhalese are the majority of the nation with 17 million. The minority Tamils are trying to create a homeland in the north, saying it will end discrimination against them. Since 1983, 36,000 people have been killed in the conflict.


Tanzanite from 1-4 carats are difficult to locate and demand is strong. Mining production remains slow, and prices are up from 25-40%.

New Find
A new find near Mozambique on the Ruvuma river has produced chrysoberyl, sapphire, alexandrite, colorless topaz, light colored spinel, occasionally ruby, and even diamond. Some experts predict this is the find of the decade. Reports claim 25 carat chrysoberyl cat's-eyes, and 8 carat alexandrites have been discovered. Production is in its infancy in the mining of the Mozambique belt. Geologists are looking for the hard rock source. Mining today is alluvial. The availability of these gems could increase if the source is discovered. Nine major foreign companies control the mining rights in the region.

Orange Mandarin Garnet
National Gemstone has been overwhelmed with the response to our last Gemstone Forecaster (Volume 13, #3), regarding the new mandarin orange garnet. For those of you who want the stone, please remember we are trying to buy more stones. We have heard excuses that the production is nonexistent in carat plus sizes, that we are in the rainy season, and that the political situation is deteriorating in Namibia. Whatever the reason, please be patient while we attempt to procure more gems. Please e-mail, write, or call us at 1-800-458-6453 to get on our waiting list.


The Japanese purchase $23.5 billion worth of gems and jewelry each year. Japanese women own an average of 14 pieces of fine jewelry. Further, 76% of marrying couples have diamonds with an average weight of .45 and costing $4470. The average Japanese consumer spends $5900 per year on jewelry. According to a Wall Street Journal survey, 87% of Japanese do not expect the economy to improve in the coming year. Jewelry consumption is slowing down, with imports dipping 1.7 % for 1995.


Ruby, Sapphire and Spinel
Two carat Mong Hsu ruby is getting hard to find. Experts seem to agree the mine will be depleted in two years. Mogok Burma ruby and blue sapphire are impossible to locate. The available Burma spinel is priced so high US dealers cannot buy the stones and resell them in the US, or the stones are so included they are not acceptable to US collectors. At Sotheby's in Geneva, a 27.37 Burma ruby sold for $4 million, or over $146,000 per carat. This was the highest price ever paid for a ruby at auction.

Visit Myanmar Year - 1996
According to SLORC, the military government that controls Burma, 100,000 tourists visited Burma between April 1, 1994 and March 31, 1995. In fiscal 1995, tourism earned SLORC $30 million, making it the largest source of foreign exchange. Recognizing the potential, SLORC has proclaimed October 1, 1996 to September 30, 1997, "Visit Myanmar Year". The target is to attract 500,000 tourists. Why SLORC will not reach its target:

  • Only 6,000 hotel rooms will be available
  • New hotels are luxury ones @ US$300/night
  • Trains are unreliable and dangerous
  • Domestic air service is limited
  • Air travel is unreliable & dangerous
  • Air passengers are bumped for VIPs
  • The doctor/patient ratio is 1:12,500 people
  • Hospitals have beds, but no medicine
  • Black market medicines are usually fakes
  • Blood for transfusion is not available
  • Purchased blood supply may be tainted
  • 400,000 people in Burma are HIV positive
  • Needles may not be sterile
  • Rabies vaccines are not available
  • Malaria is endemic throughout Burma
  • "Bottled water" is taken from the tap


Regulating The Emerald Trade
The Colombian government is going to introduce legislation to regulate the emerald business. They want to step up the scrutiny of emerald exports. The emerald trade has long been used to launder illegal profits from the drug business. The government wants to stop people from illegally bringing money into Colombia. The government does not plan to focus on legitimate gem dealers, but rather focus on those who use the trade as a front for illegal activities.

The Colombian government is concerned with the declining sales, especially to Asia. The declining sales are due to the lack of Colombian production, which has decreased the last two or three years. Most of the Muzo and Chivor production today is light green in color and with light tones. The majority of the goods we are seeing are 4.5-5.5 colors and 65 tones. The world's emerald buyers want deep green colors with medium tones. The only fine emerald on the market is the rough that was found years ago coming out of the wreck of the Atocha.

Drug Trade
Helmer Herrera's reign may be near the end. He is the last of the Cali cartel's bosses. He has a $1 million price on his head. His sister is in jail. His property has been seized. The six other leaders of the Cali cartel are in prison. Two of his lawyers are negotiating with the Colombian government for his release. Arrest warrants for other family members have been issued. Recent bombings against an elite anti-drug police force in Cali have been traced to Herrera. He was also instrumental in helping the Colombian government destroy the Medellin cartel.

President Threatened
President Samper was recently threatened by Dignity for Colombia. This group is linked to the killings of numerous prominent Colombians. This group says Samper took millions of dollars from the Cali cartel, then launched an offensive against the cartel. Colombians are unsure whether the group is right-wing or left-wing. President Samper declared a state of emergency. He vowed to prevent the terrorism that engulfed Colombia in the late 1980s when the Medellin cartel killed thousands of people. A caller representing the group to the newspapers said, "Your armored cars won't be worth anything when a 1,000 kilo charge of dynamite explodes next to you, directed by one of our kamikazes."

Cali is a city of 1.8 million people, and is the home of the notorious Cali drug cartel. According to a new study by the Centers for Disease Control and Prevention, Cali's homicide rate has increased more than fivefold since 1985. Homicide is the leading cause of death in Cali. More than 104 out of every 100,00 people were killed in 1993. The worst US city is Gary, Indiana with 89 out of every 100,000. Eighteen percent of all deaths in Colombia are from homicide vs. 1.2% in the US. The study found 79% of the deaths were from gunshots. Also, 94% of the deaths occurred in a public place. Suspects were identified 25% of the time, and only charged 9% of the time, Of the suspects identified, a hired assassin was the shooter 71% of the time. Cali officials are attempting to ban guns in public during weekends, holidays, and during elections.


Emeralds supplies up to five carats are up. These stones trade for 1/2 the price of Colombians. Many alexandrite parcels are being salted with synthetics.


A recent discovery of neon apatite has caused a stir among collectors. Collectors have been buying the bright blue and green colors. The reason is they are the same color as the Paraiba tourmaline for a fraction of the price. Although the stone is soft, it is available form $100 -$200 per carat in gem quality vs. $2000-$5000 for similar looking Paraiba tourmalines.

Peridot from the Suppatt region has excited collectors and dealers internationally. Large, clean, excellent color material is currently available, but do not expect it to last.

For those of you who do not own a Paraiba tourmaline because the mine is depleted, a new find of blue tourmaline was recently found near Parelhas, 32 miles away from Paraiba. The stones are similar to Paraiba, and are colored by copper. These stones are reported to be sky blue. These stones also are reported to not be heat treated. Expect prices to remain in the $2000-$5000 per carat ranges. The monthly yield is 2.2 pounds of 1-3 carat stones. The yield is expected to be gems averaging .20-.30. Let us know if you have an interest in these new stones, and we will look at the Tucson Gem Show in February, 1996.

Also a new find is reported of blue and green tourmaline near Itambacuri. The stones are similar to Paraiba, but not so neon.

United States
Kennecott has purchased the Utah Red Beryl Mine and the Benitoite mine in California. Look for increased production and marketing of red beryl in the next few years.


The Gemstone Forecaster has not written anything substantial regarding the Canadian boiler rooms issue in over 10 years. Obviously, it is time to revisit this issue. All of these stones are coming from clients who are finding us on the Internet. We have received stones that have been sealed in plastic with grading reports from the following two labs:

Gem Information Laboratory, Inc.
Seybold Building
36 NE 1ST Street, #1046
Miami, FL 33132

Gemstone Identification Laboratory, Inc.
Empire State Building, Suite 3304
350 5th Avenue
New York, NY 10118

As an example, one stone was a 1.02 blue sapphire graded 3.5/80 (color/tone) LI (clarity). Upon removing the stone from the seal, we discovered it is an inexpensive, dark (almost pure black with a small flash of blue under high intensity lighting), Australian sapphire. You can buy this at gem shows in buckets for $10 per carat. The client paid $1500 for the stone. As Gemstone Forecaster subscribers know, to receive a 3.5/80 LI from the American Gemological Laboratories (AGL) is extremely difficult. A Ceylon blue sapphire with AGL paper stating the stone is 3.5/LI could be worth $3000.+ This misgrading is like a lab calling a diamond a D-IF, and then having the stone turn out to be an M color, I3 clarity! Beware of these labs!

If anyone high pressures you into buying anything, please be wary. Every investment (stocks, commodities, bonds, real estate, metals and gemstones) is a risk. When you invest, whatever goes up can and probably will go down. If you cannot accept some risk in your portfolio, put all your money in bank CDs or Treasury bills. Gems should represent only a small part of your total portfolio. Most advisors view gold, gems, rare coins as an insurance hedge against inflation or an economic catastrophe. Hopefully, you will never have to use them. If you do, at least you are prepared.

To properly collect gems, you must buy near true wholesale. If you are buying a diamond, make sure you are buying near the Rapaport Diamond Price List. Purchase a diamond with a Gemological Institute of America (GIA) Grading Report. If your interest is colored stones, use Gemstone Price Reports, or the GAA Market Monitor, or National Gemstone's price lists. These lists are for stones with American Gemological Laboratories (AGL) Grading Reports only. If you do not subscribe to these price guides, have your dealer xerox these price lists and prove to you where you are buying. Chances are unknown labs are being used to dupe you. The price lists are only accurate with proper grading reports. You must compare apples with apples.

Never buy a stone that is sealed with plastic that you or a gemologist cannot examine. Stones are sealed in plastic for the seller's protection, not the buyers.

If you buy gemstones from these Canadian companies, you may receive a second call. This time, a salesperson may try to convince you that buying more stones will make your "gemstone portfolio" more attractive for sale to outside "investors" or at alleged auctions. Does this even make sense? It is fine to add to your gem portfolio, but do it for the right reasons-you are further diversifying your portfolio, or you are trading up to improve your gem collection. However, 99% of the time, by adding a gem to your portfolio, it will not make your portfolio more valuable. A salesperson also may call with the promise of a buyer for your stones. Before a buyer can be introduced, however, you may have to pay money up front. The money is needed, you are told, to cover a finder's fee, commission, examination fee, or "required" duties or taxes. Does this make sense? Would you send your stock broker up front money to sell 100 shares of IBM? As part of the deal, you may have to buy additional stones before you can sell any. After sending your money, you may receive stones of questionable value, but no word of a buyer. Whatever the approach, consumers who buy from these Canadian boiler rooms inevitably end up with gemstones worth only a small fraction of what they paid. In addition, the promises of easy resale, outside buyers, and upcoming auctions have all proven false. Consumers who believe these promises can expect to lose all your money. Gems should be bought and sold individually on the stone's own merits.

For More Information
If you have been experiencing problems, you can call or write all of the agencies below. When writing to register a complaint, include a complete history of your involvement with the gemstone company. You should enclose copies of all letters, brochures, or other material you received from the firm in addition to any correspondence you may have sent.

Federal Bureau of Investigation
Check your telephone directory for your local FBI office.

Federal Trade Commission
6th Street and Pennsylvania Ave., N.W., Room 200
Washington D.C. 20580
Contact: Denise Owens
(202) 326-3277

National Fraud Information Center
Consumer Assistance Hotline
9 a.m. - 5 p.m. EST, Monday-Friday

Royal Canadian Mounted Police
(written complaints only)
225 Jarvis Street
Toronto, Ontario M5C 2M3

225 N. Humphreys Blvd.
Memphis, TN 38106

A centralized US location for complaints:

American Gemological Laboratories
Gemline Recovery Service, Cap Beesley
580 Fifth Ave., #706
New York , NY 10036

It has been my experience that it is practically impossible to get any money back from these scum suckers.

Basically, your options are:

  1. Legal- Be prepared to spend at least $20,000.
  2. Communicate with the organizations listed above. AGL Gemline Recovery Service, Cap Beesley, President, has had some success in dealing with these crooks. If you purchased gems with a credit card, you have a better chance than if Federal Express picked up your check.
  3. Liquidate in the real wholesale gem market or mount your gems in jewelry.

The number and diversity of the scam artists are incredible. You should always ask, "Is this deal too good to be true?" The key to successfully collecting gems is hard work, solid research, and smart thinking. Knowledge is power. Learn about gems before you buy, study the legitimate gem laboratories, and gem prices. Most of all, use common sense. Do not send your money to a Canadian firm that promises you excitement and quick money. If you are an American who wants to collect gems, buy and sell with a reputable US company or your local jeweler. At least you have the BBB, Chamber of Commerce, and legal recourse.



Description Of The New Currency

The new currency will be the same size and general color as the old currency. Multi colors were rejected to reduce the accusations of printing monopoly money.

Since most people focus on the portrait to verify a notes authenticity, the enlargement of the portrait of Benjamin Franklin makes it easier to recognize, while the added detail will make it harder to duplicate. The portrait is now off center, providing room for the watermark and security thread. Franklin's portrait is a little different from the old portrait.

A watermark has been added on the right front side of the note depicting the same historical figure as the portrait. This watermark portrait is only visible when held up to a light source and does not reproduce on color copiers, color scanners, or on any camera work for offset printing. Watermarks are used by many countries as a counterfeit deterrent.

Color Shifting Ink
Color shifting ink changes color when viewed from the different angles. This ink is used to print the number in the lower right hand corner on the front of the currency. The ink looks green when viewed straight on, but changes to black when the paper is held at an angle.

Security Thread
This polymer thread is embedded vertically in the paper and indicates each bill's denomination. The words on the thread can be seen when the bill is held up to the light, but cannot be duplicated by photocopiers and scanners. In the 1990 Series of bills the security thread only appeared on the left side of the bill. As an additional enhancement the new security threads will glow red when lit by ultra violet light.

Microprinted words are extremely hard to replicate without blurring. Originally located around the portrait of the 1990 Series Notes, microprinting has been modified for the new design. Examples of the microprinting, which can be read under magnification, now can be found in two places on the front. "USA 100" is microprinted with in the number in the lower left hand corner, while "United States of America" appears on Benjamin Franklin's lapel.

Federal Reserve Seal
A letter in the serial number will identify the issuing Federal Reserve Bank, instead of being different for each Federal Reserve District.

Serial Numbers
The serial number is a combination of the eleven numbers and letters on the front of the note in the upper left hand corner and the lower right hand corner. An additional letter has been added so that no two bank notes in circulation will have the same 11 character number.

Concentric Fine Line Printing
This is a series of fine lines that is very difficult to reproduce in copies and scanners. It is used on both sides of the bill. It is used behind Benjamin Franklin's Portrait on the front and Independence Hall on the reverse. It will appear just as one color on most copiers.

This new U.S. Currency is able to set off metal detectors at an airport. The metal detectors are set off when, depending upon the setting, a certain amount of metal passes through the detection field. If you have a large amount of U.S. bills on you it will set off the detector. This is because the intaglio printing process uses ink made from metal oxides. U.S. Currency can also be detected with the more sensitive metal detectors sold for mineral prospecting. The new $100 US bills will be out in January, 1996. There should be a surge in hard assets as the new money is introduced. Those who have been hoarding cash will probably want to keep their assets private and trade in their old currency for gold, rare coins, and gems. Remember, it is against US law to keep more than $5000 in US currency not intended to be spent. This is one more reason to place some of you private wealth into diamonds and gemstones.


Congress is moving forward with what will be a national ID card or universal indicator-a federal database requiring employers to first check with the government before hiring an employee. The legislation (H.R. 1914) was introduced by Lamar Smith (R-Texas) to keep illegal aliens from taking jobs from Americans. A similar bill was sponsored by Alan Simpson (R-Wyo) in the Senate. This permission-to-work card is supported by both parties and the White House. Prototypes of this database are currently running in 20 test companies, and the INS is hoping to obtain another $50 million to expand the number of test companies. Representative Steve Chaboot (R-Ohio) is in opposition to the bill which was passed in the House Judiciary Committee. He stated the database plan is "an unprecedented assertion of federal power akin to calling 1-800-BIG-BROTHER." Critics of the bill contend it is government overkill because only 1.5% of the US population are illegal aliens. Representative Bill McCollum (R-Fla) wants to go further than the Smith legislation. He plans to offer an amendment to create a social security card with a photo, hologram, and biometric identifier which includes a retina scan and fingerprints. According to the Cato Institute study on new microchip technology, one ID card recently patented can hold up to 1600 pages of information. Another identifier system developed by Hughes Aircraft, consists of chip the size of a grain of rice that can be implanted under your skin, and read with a scanner.

Harris Poll
According to the 1995 Harris poll, 80% of Americans agree that consumers have lost all control over how personal information about them is circulated, up from 71% in 1990.

The information provided in this newsletter has been derived from research and sources believed to be reliable. However, no guarantee is expressed or implied as to their validity. Opinions included herein are subject to change without notice. Potential investors or collectors should understand past performance is not a guarantee of future performance. This is not intended as an offer or solicitation with respect to the purchase or sale of any security, nor is it intended to be investment advice.