Ask A Genius 1174: Rick’s Wife Gold and Rick
Author(s): Rick Rosner and Scott Douglas Jacobsen
Publication (Outlet/Website): Ask A Genius
Publication Date (yyyy/mm/dd): 2024/11/12
*Interview conducted in October-November, 2024.*
Rick Rosner: So, I will talk about gold—not just its value, but the fact that there’s more gold in the universe than expected according to the standard Big Bang theory. The heaviest element that can form during the normal stellar burning process involves hydrogen fusing into helium, releasing heat. Under gravitational pressure, helium and thermal motion at the center of a star can fuse to create lithium and other elements up to iron. Iron limits what can be formed in a typical burning star.
When the star runs out of energy, if it’s big enough, it collapses. That collapse triggers an immense explosion, a supernova, with enough compressive action at the center to form gold. It’s a rare occurrence.
Another theory is that gold can be created when two neutron stars collide. Either way, the process is sporadic and violent, creating conditions that are “explodey and crush,” as you put it, and capable of producing gold. Yet, we have more gold than one would expect.
It’s rare and valuable, but having a significant amount of it is intriguing. And it’s not just gold—all elements heavier than iron, number 26 on the periodic table, are produced in these extreme events. The universe is about 14 billion years old, and there’s more of this heavy stuff than basic physics might suggest.
That’s the physics and cosmic background of gold. Now, on a more personal note, I used to work with gold.
Scott Douglas Jacobsen: How so?
Rosner: In 1989, my wife got a job at Avon in New York City. We weren’t married yet; we were living together then. She started to become increasingly disgusted by New York City. It was covered with every bodily fluid you could think of—barf, urine, and even worse things. There was always this pervasive hot garbage smell, and she was disgusted with it.
Jacobsen: I can imagine. New York can be intense.
Rosner: Avon happened to own Giorgio Beverly Hills, which, in the 1980s, was quite famous—this was during the prime-time soap opera era with shows like Dallas. There was a sense of Beverly Hills glamour that was popular then. Giorgio had a fragrance line and some fashion items.
So, Carole wanted to move back to L.A. She’s originally from L.A., so she wanted to return. Avon owned Giorgio Beverly Hills, and she got a job there. Giorgio had grown from a small company to a medium-sized one as it gained popularity. It was making some of her coworkers behave in a rather catty way. Carole would come home and say that some women were flaunting knock-off Chanel suits and cocktail rings. This was back when jewelry and fashion accessories were a much bigger deal.
And she felt intimidated. At the time, I was mostly unemployed. I was working odd jobs: bouncing at bars, nude modelling for art classes, and tutoring for the SAT. All of them are pretty low-paying. My days were mostly free, so I started looking into making jewelry for her. I researched and found that we couldn’t afford fancy store-bought jewelry, but we could buy the materials for about 10% of the retail price. For instance, you could get large gemstones like blue topaz, citrine, and amethyst for about a dollar per carat because they had minor chips or imperfections. Those are the stones that manufacturers chip during production.
Companies like QVC would commission thousands of rings to be made in Mexico by semi-skilled labourers, and some stones would get chipped in the process. These slightly damaged stones were then sold at a discount so I could get large stones, some the size of a pigeon egg, for around $50. I signed up for a jewelry class at a junior college to access their equipment for soldering and started making pieces for Carole. It was fun to give her extravagant-looking jewelry that didn’t cost much, allowing her to keep up with the other stylish women at work.
Jacoben: That’s a clever way to approach it.
Rosner: I got into it and even learned about lost-wax casting. I started making more intricate pieces, which meant I needed to buy or find gold. I learned about buying gold at spot price and melt price. Gold was around $800 an ounce back then, which was expensive. I would buy a quarter-ounce piece for a couple of hundred dollars and then mix it with silver and copper to stretch it, lowering it from 24-karat gold.
Jacoben: So, you were creating lower-karat gold?
Rosner: Yes, I was so thrifty that I made 5-karat gold. It still looked gold enough because I would add more copper to give it a richer, orangey tone. Even at five karats, it had a discernible golden look. I also learned that the professional markup is about 1% when buying gold for jewelry. When you sell scrap gold back, there’s a markdown of about 1%.
And it’s accepted as long as the scrap gold has a designated carat value, like 14-karat—which is 7/12ths pure gold. I did that for a while, but then I started getting T.V. writing work and stopped making jewelry because I finally had stable employment. With my kid getting married, I thought about the scrap gold we still have lying around.
And I thought, why don’t we sell the scrap gold, which belonged to beloved relatives, and use that money to buy wedding rings for our kid and her fiancé? It’s a way to repurpose cherished gold that’s no longer in fashion from people who have passed on into new gold that will hopefully be worn for decades until death do them part. So, we went to the coin shop, and they weighed the gold. Gold is now $27,100 an ounce, which translates to around $33,100 Canadian.
That’s extremely expensive, but not surprising, given the state of the world. Is this interesting? I think so—it’s compelling in a personal way.
So they offered us 80% of the value of the gold. I thought, what? That’s wild. But they said it’s because it’s scrap, and some 14-karat gold is only about 12.5-karat. It seemed like a bad deal, so I asked if they could at least give us 83%. They agreed, and we walked away with a few hundred dollars for the scrap gold.
I know that feeling—walking out after a negotiation and realizing hours later that you might not have haggled hard enough.
I even returned to a car dealership the next day to confront them because they ripped me off. They told me, “Get out of here; you bought the car.” I realize I might have gotten a bad deal hours after it happens when it’s too late. I probably got shortchanged this time, too. But at least I still got paid at about $22,162 per ounce, which is still a substantial amount.
Carole has this habit where she’s not exactly delighted when I’m wrong, but she does point it out. I told her we’d probably get around 96% of the spot price based on my call to the shop, where they mentioned offering $26,100 for a Krugerrand when the spot price was $27,100. But in reality, they offered us only 80%. Carole couldn’t help but say, “You were wrong,” which she seemed a little too pleased about. And that’s the end.
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