The Recycling Entrepreneur

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 ISSN: 1539-6789    (C) Scott D. Andrews September/October, 2002

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In This Issue...

1. Announcements & Commentary

2. PGM's and Catalytic Converters - How is a Diesel Converter Different?

3. Book Review: Guerilla Capitalism, ISBN: 0-915179-16-4, by Adam Cash

4. Trivia - How long have precious metals been used in dentistry?

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*** Section 1 ***

Welcome to the September/October issue of The Recycling Entrepreneur, the monthly newsletter devoted to those interested in the subject of recycling for profit.

First, some 'housekeeping'. If you have received any emails ostensibly from me which contain ANY ATTACHMENT, delete it immediately.

I do not and never will send you anything in an email which you cannot see. I would suggest you so the same for ANY attachment from ANYONE whom you do not know very well and which you are not expecting.

Although my PC resides behind two firewalls and I use redundant virus protection, my emails have been compromised and I am hearing from both customers who've gotten emails with attachments and viruses with my return address, as well as removal requests from user groups and newsletters that have gotten false unsubscribe requests from
my address.

I'm not sure what else I can do other than be very careful. If any of my loyal customers have a suggestion or resource to help deal with this scenario, I'd love to hear it.

Onward...

I have spent the past two (glorious) weeks traveling around France, and have come back with some fresh information and new insights to share with you, my loyal readers.

But first, a warning to anyone who might be buying sterling silver jewelry or other sterling products. There is a lot of news circulating within the precious metals community regarding the possibility of a major scandal brewing.

This involves some of the largest retailers in the world selling, whether knowingly or unintentionally, mis-marked sterling products. Some of the more radical members
of the community are proclaiming that this extends to such a magnitude as to start to explain why the silver shortage statistics are so skewed.

Regardless, there have been numerous reports of people taking magnets with them when buying sterling. I have yet to see any way that real sterling (92.5% pure silver) could
be rendered highly magnetic, no matter what it is alloyed with.

Yet many in the know are reporting cursory testing of supposedly sterling items that are indeed magnetic. And not just one or two items being sold in the store, but much of
their sterling inventory.

If this is indeed the case, it portends a scandal of major proportions. I would be interested in knowing if you have any experiences in this area. Please let me know if you should hear of this news in your area. I strongly recommend that whenever you plan to buy any type of
precious metal product, you carry a magnet with you and give it a quick test.

On a lighter note, I had the opportunity of attending the Paris Auto Show while in France. I was there two years ago and did the same at that time. This is one of the premier auto shows in the world, and is automotive Nirvana!

However, lest you think I whiled away my time there drooling over $300,000 sports cars, such is not (entirely) the case. I did return with some good information regarding exhaust systems, especially those on diesel-powered vehicles. I will share some of the technical details of these systems, and why the outlook for platinum, and the recycling of catalytic
converters, is VERY bullish.

While in France we drove over 1,500 miles (about 2200 kilometers), much of it at speeds in excess of 90 miles per hour (or 150 kph). Other than in cities and towns, I did not see one speed trap or even any police patrolling the autoroutes.

What fascinated me was that we rented a Renault Laguna, which is four-door full-size
hatchback about the size of a Camry or Accord. This, however, had a 1.9 litre diesel engine (tiny by our standards) which had outstanding performance.

With a six-speed manual transmission, this vehicle would accelerate much more quickly than I had expected, was very quiet, and would cruise at 90-100 mph all day long while getting outstanding fuel economy. I didn't track and convert it specifically, but we were getting over 30 miles per gallon at these speeds.

Also interesting was the fact that it produced no more visible exhaust than a gasoline vehicle, regardless of speed, temperature, or throttle load. It became obvious to me that the Europeans are a few generations ahead of the US in diesel technology.

At the auto show, I found out why that is, and why this technology is likely to start coming to these shores in the near future. Of course, there is an economic and recycling angle, which I'll share with you in the next article.

Now this, from www.pirateinvestor.com : HOW TO SAVE $40,000 A YEAR, TAX-FREE
"There's a new way to play catch-up with your retirement portfolio. If you are self-employed, or if you have your own sideline business, you can now open what's called a
"solo 401(k)." This new plan lets you sock away as much as $40,000 in a single year, instead of the usual $11,000 you can put in your company's 401(k) plan.

As you probably know, a 401(k) gives you a great tax break, because it enables you to put away money before it's taxed. If you have a regular 401(k) with your employer, you can
probably still qualify for your own solo 401(k), as long as you've got an outside source of income (such as consulting or writing or a weekend business).

Look at what this new plan can do for your tax-free savings. If you earn $10,000 a year in your own business, you can put all of it away in a solo 401(k). In other words, you'd pay no taxes! (read that again! - editor)

If you earn $50,000, you can stash away $23,500 tax-free. $100,000 in profits lets you put away $36,000...and $150,000 in profits lets you put away $40,000. That's the max, according to what I've read.

These plans cost anywhere from $10 to several hundred to maintain each year. I called Vanguard--where I have the rest of my retirement accounts--to set up a solo 401(k)
right away, but they're not offering these accounts yet.

Fidelity seems like a good option. They charge $50 a year in maintenance fees, and waive the fee if you invest $30,000 or more.

Before you open a solo 401(k), find out what your investment options will be. Some companies, such as Pioneer, allow you to invest only in their funds. You should find a plan that lets you invest in all kinds of mutual funds, stocks, bonds, and CDs."

Do I need to say more about the value of having your own home-based business?.

If you have questions or suggestions as to what you'd like to see covered , let me know and I'll do my best to address it. Remember, this ezine is designed to be support material for "The Recycler's Library". If you are not currently an owner of the manuals, please
Buy Them NOW!

Back issues can be found at: http://recyclebiz.com/the_recycling_entrepreneur_newsletter.html

*** Section 2 ***

Okay, I know you're dying to know more about my 'adventures' in Europe. Yes, I REALLY went, and yes, I DO have the tee shirt to prove it!

As I mentioned, the Paris Auto Show turned out to be a treasure-trove of information for this information-hungry recycler. Had a stimulating conversation (in halting English) with some exhaust system manufacturers reps who turned me onto some insights I was not aware of.

According to Johnson-Matthey, platinum demand for auto catalyst use in 2001 was about 2.52 million ounces.

What is particularly telling about this figure is that it represents a worldwide increase of 33% over the previous year. The European share of platinum catalyst consumption
increased by 55% over 2000 - and this in a period when total vehicle production only rose one per cent.

In Japan, although auto production fell by 3% during that year, auto catalyst demand for Pt rose by 20%! Now, the number one reason for this increased demand for platinum is the increasingly stringent emissions standards that have gone into effect in Europe and Japan.

The cheapest methods to meet these new legal restrictions obviously involve the use of greater and greater platinum loadings on new vehicle convertors. And just to give you pause to think, China and India are now requiring new vehicles (gas powered, at least for now) to meet the previous European standards.

Any guesses as to what this will do to platinum demand in the next few years?

And now, the rest of the story... My experiences driving a diesel-powered vehicle around Europe led me to ask about the technology being used to clean up this notoriously dirty
exhaust. Truth be known, diesel exhaust is relatively 'clean' from the standpoint of "non-visible", or chemical emissions.

We're all aware of the dirtiness from the visible standpoint. These are called 'particulate matter', or PM's, and are tiny pieces of soot. As an interesting side note, these are exactly
the size and composition most likely to cause small health problems - things like lung cancer!

For exactly this reason, recent emissions standards, especially in places other than the
US, have severely restricted the amounts of the PM's generated by diesel engines.

As a result, the Europeans have developed some advanced technologies to meet the limits imposed - involving both engine control systems and design and exhaust system technology.

You're probably asking, why bother? First, you need to realize that in some European countries diesel auto sales account for OVER 50% of total sales! The reasons for this are manifold - and most are financially driven.|

First, many countries tax diesel fuel at much lower rates than does the US. 2001 figures show diesel fuel being 23% lower per adjusted gallon in Western Europe than gasoline. Now take into consideration that diesels are significantly more efficient from a fuel-burning (economy) standpoint than comparable gas engines.

As you're likely aware, gas prices in Europe are two to four times what they are here in the US. These factors, combined with the fact that diesels are inherently stronger in design and require less maintenance than an equivalent gas engine, you've got a no-brainer buying decision for your average European driver. And, as I mentioned earlier, the performance, for typical driving, gives up nothing up to the gas engine, except for sustained, very high-speed driving (like over 120 mph).

Ok, Scott, what's the point of all this, I'm sure you're asking? Because diesel exhaust is not real hot (120-350 deg C) diesel catalyst is comprised of platinum ONLY. Since diesels burn fuel in a ratio of 30:1 air:fuel they are considered lean burn.

A gas engine fuel:air ratio is on the order of 14.7:1, which results in a much hotter exhaust stream (350-750 deg C) which can be oxidized and reduced with much less platinum, especially if you add a touch of palladium and a smidgen of rhodium.

The economics of diesels and the platinum group metals are coming together to create "The Great Metals Storm". Frankly, if I were given the opportunity to buy a diesel vehicle made with the latest European technology, I'd seriously consider it. This technology WILL spread to the US as well as the rest of the world (don't forget the billions of people in India and China alone).

If (when) fuel prices shoot upward with the increase of "tensions" in the Middle East, and the US finally developes some sense of environmental concern, you will see more and more diesel vehicles (especially in SUV's, where they are especially well-suited) sold here.

Bottom line: you've got a lot of new vehicles with increasing amounts of recoverable PGM's being sold worldwide. Last year, about 370,000 ounces of platinum (in the US alone) were recovered from auto catalyst. Last year, 790,000 ounces were used in new US vehicle production.

We're currently around 60% effective in terms of total recovery of available PGM. In the rest of the world, recycling of auto catalyst is in its infancy.

Do you detect an opportunity here? Don't let anyone tell you all the catalyst out there
is being located and recovered. And this is NOT a shrinking market! Whether you make a small fortune doing so is entirely up to YOU!

Want to read more about the specifics? Go here:
http://www.platinum.matthey.com/publications/pdf2002/Pt_2002.pdf

*** Section 3 ***

Book Review: Guerilla Capitalism, ISBN: 0-915179-16-4, by Adam Cash

This small paperback is not my usual subject for a book review, but is an entertaining read
for those interested in 'laissez faire' economics and the independent (or 'underground') lifestyle.

This book is one of many published by Loompanics (www.loompanics.com), a publisher of arcane and better-left-unknown information. Their catalog makes for some entertaining reading although you will most likely (violently) disagree with a lot of the information they make available. As a matter of fact, some of it will probably make you start questioning the wisdom of the First Amendment!

If you see this book at a flea market or second-hand book store, pick it up. Read especially the chapters on making a living dealing in scrap gold and precious stones. If you glean one idea or small motivation from the story, it will be worth the few dollars spent.

*** Section 4 ***

Trivia Question - How long have precious metals been used in dentistry?

Diseases of the teeth and jaws were first identified around 3000 B.C. by the ancient
Egyptians, and it has been verified that surgical removal of "bad teeth" was performed
by these early people. However, the Etruscans were skilled in gold and metal work, and there is evidence that they were replacing missing teeth as early as 700 B.C. !

From a restorative standpoint, silver amalgams have been in use for over 150 years to
restore and maintain the integrity of teeth that are able to be saved. Gold and platinum
foils packed into drilled teeth have been in use for about the same amount of time.

The determining factor in being able to use these techniques was the development of the early dental drills, which were treadle-operated, to enable the "dental practitioner" to excavate and rid the teeth of internal decay before a filling could be accomplished.

Next month's question: How much platinum is there in a spark plug?

*** Section 5 ***

Coming next month: A new book review; some little-known opportunities outside the precious metals; when will silver take off?, and... the "Precious Metals Master File" - is it the "Rosetta Stone" for recyclers?

Lastly, from the "You Can Sleep Well Tonight Knowing Your Government Is Looking Out For Your Well-Being" files (and an appropriately witty response):

Subject: Dam builders

 This one is a genuine hoot. It was an actual letter sent to a man  named Ryan DeVries by the Michigan Department of Environmental Quality, State of Michigan.

Wait till you read this guy's response.......but read the letter before you get to the response........

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