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 Friday, May 15, 2009
What ceremony? Give us the coins
Posted by Dave
Some 3,000 to 4,000 people made their way to the Lincoln Amphitheatre in Lincoln City, Ind., yesterday for the ceremony officially introducing the second 2009 Lincoln cent design.
They mostly ignored the actual ceremony. My contact, Don Mark, a hobbyist from Johnston, Iowa, who drove over with Mark Olson estimated the capacity of the theatre at 1,500 and of that only about 10 percent was used.
Why?
He said that people going to the ceremony would lose their place in line to get the rolls of the new coins for face value.
So Mint Director Ed Moy and other dignitaries basically talked to an empty house.
The six-roll per person restriction was in effect all day, unlike the event at Kentucky in February when at the end remaining boxes of the cents were available to anyone who wanted them.
However, participants could go through the line more than once – and they did.
Don and his fellow collector went through the line three times, each gaining 18 rolls for their effort.
The first time, he said, it took 30-45 minutes to get to the head of the line to get coins, but he pointed out that he arrived on site at 8 a.m. for a 10 a.m. ceremony and coins weren’t distributed until after the ceremony’s conclusion.
For the second time, Don said the line was 1,500-2,000 people long and it took an hour and a half to reach the coin distribution point.
The third time, he estimated, the time required was almost as long, at one and a quarter to perhaps one and a half hours.
Don said he witnessed the wheeling out of the last five boxes of cents from the Brink's truck, so he said all the available supply was distributed.
Don also said he talked to someone who had been at the Feb. 12 Kentucky ceremony and was told that the crowd in Indiana was about four times the size of the Kentucky crowd.
An interesting tidbit was that leaflets were distributed telling people that it was illegal to buy and sell in the park.
If everybody rushed home to offer the coins on eBay, the odds are that the wider distribution will help hold prices below those that prevailed for the first design.
However, if the bulk of the people were there solely to acquire coins for their collections, that would be another matter. The greater publicity might also help push prices higher as individuals who missed the first issue try to catch up with the second.
Friday, May 15, 2009 2:04:37 PM (GMT Daylight Time, UTC+01:00)
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 Thursday, May 14, 2009
What's gold trying to tell us?
Posted by Dave
I did my usual gold check this morning and saw a price of $923. There is nothing remarkable about either the price or the continuation of my morning habit of checking up on it.
That’s just it. It has gotten – dare I write this – boring.
Since the record price of just over $1,000 was set in March 2008, the price has basically been going sideways at the $900 level. When the price goes over that amount, sellers seem to come in and dump a little. When the price dips under that figure, buyers come in and take a little.
It adds up to a scoreless tie in the 11th inning of a baseball game. Unless you appreciate the finer points of pitching and perhaps good defensive plays, the game is kind of dull.
That’s where we are with gold. For 14 months we have been going sideways.
The bulls are betting on inflation taking the price higher. They cite a rapid increase in the balance sheet of the Federal Reserve, which has indeed more than doubled to around $2 trillion. They cite the $787 billion bank bailout and the $1.8 trillion U.S. budget deficit for the coming year. They also cite Chinese buying.
With all that, why isn’t gold higher?
On the other hand, some believe gold will fall because deflation is sweeping through the world. The prices of U.S. houses have dropped by 30 percent, drastically impairing the ability of many Americans to spend. The price of oil is down 60 percent from its $147 peak. The U.S. Consumer Price Index has fallen year-to-year for the first time since 1955.
OK, so why isn’t gold lower then?
Both sides cite plausible facts to support their case, but the price of gold doesn’t seem to be reacting to either.
So what is the gold market trying to tell us? What if it is saying economic forces are evenly balanced: catastrophe isn’t coming but neither is recovery?
What then? What then, indeed.
Thursday, May 14, 2009 2:01:00 PM (GMT Daylight Time, UTC+01:00)
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 Wednesday, May 13, 2009
Clamor for cents begins tomorrow
Posted by Dave
Tomorrow is the big day. The second Lincoln cent design of 2009 will be introduced in southern Indiana.
Interest continues to build in the affair because individuals will be able to obtain up to six rolls of the new cents for face value.
The cost of $3 can be multiplied in value because dealers will be on hand to offer premium prices to those who get them. How high these prices will go tomorrow is a good question because I have been made aware that multiple dealers and other individuals will be on hand to buy coins from individual attendees who get their allotted share.
Minimum purchase is two rolls at a cost of $1. Maximum is six rolls that would cost $3. Anyone who takes the minimum tomorrow will pass up the opportunity to make an immediate profit. I don’t see anyone willingly taking the minimum.
The greater likelihood seems to be a large crowd and a rapid depletion of the cent supplies on hand. We’ll see.
The Mint has given itself wiggle room by noting in its most recent statements that the limits are subject to change.
Members of the crowd probably would likely get a little testy if when they arrive they are told that they can buy fewer than six rolls.
In a roundabout way this is good news. Cents haven’t gotten much respect in recent years. Many or even most people won’t pick a cent off the street or sidewalk if they see one.
I still think of serendipitous finds of this kind as “lucky pennies.”
Those who are able to buy rolls tomorrow will undoubtedly find them lucky if they define the term as being worth more than face value.
How high will their values go online and elsewhere? That will depend, I suppose, on how many coins are acquired by dealers and others whose sole purpose will be to sell them as fast as possible.
More coins in those hands will have the effect of holding prices down, because they will be competing against each other to sell them and buyers will have many offers to choose from or lots to bid on.
Still, somebody will complain about how events unfold tomorrow. That is the price of success.
Wednesday, May 13, 2009 2:05:47 PM (GMT Daylight Time, UTC+01:00)
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 Tuesday, May 12, 2009
Back from the final frontier
Posted by Dave
If you are reading this at the usual time, then all is right with my blog after a server migration issue and then a problem with a local Internet provider made my life more exciting than usual.
Yesterday, when I was trying to be clever, my blog could not be posted until almost four hours after my usual time because of a local Internet service outage.
Things like this do happen, but it is uncanny that things like this tend to bunch together rather than being evenly dispersed through time.
Perhaps it is better that they bunch together because I can then put them behind me for awhile.
As you might have gathered from yesterday’s blog, I did see the Star Trek movie. I was a fan of the original TV show, which debuted 43 years ago.
There is something about getting into a jokey mood that makes it hard for me to refocus on the nuts and bolts of the hobby. I see Braille commemorative dollars are going up with the space shuttle. Rather than treat it seriously, I want to write that the Mint should arrange to send a couple of hundred million Presidential dollars into space.
You get the idea.
Perhaps a sentence to yard work will bring me back to the here and now.
Tuesday, May 12, 2009 1:59:50 PM (GMT Daylight Time, UTC+01:00)
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 Monday, May 11, 2009
Dollars held until the 23rd century
Posted by Dave
The new Star Trek movie hit theaters over the weekend. Capt. James Tiberius Kirk saves earth in the 23rd century.
What wasn’t in the plot but could have been was his Iowa hometown’s celebration of their new hero.
Among the events held there, U.S. Mint Director Edmund C. Moy VIII officially released some of the three billion Presidential dollars that had been in storage for over 200 years.
Moy, a direct descendant of the Mint director who oversaw production of some of the coins, took another leaf from his ancestor’s playbook and spent some of the coins for lunch.
They are still legal tender and the audience found the whole exercise fascinating because coins hadn’t been used on earth for over 100 years.
The Mint still exists as a small cultural office that oversees a museum in Philadelphia and is custodian of the Presidential dollars and other coins that were considered important enough to be retained in long-term storage.
The Numismatic Guaranty Coin Grading Service was on hand to grade the newly released coins. Trading among collectors of odd and curious money, which these coins have become, indicates that dollar coins in the top grade of MS-1,000, bring high prices.
President of the American Numismatic Association, Patti Mishler Horton-Finner, was supposed to be on hand, but could not be. Lawyers detained her with depositions in the pending lawsuit against ANA for changing the grading system from 700 points to 1,000.
Moy noted in his remarks that the coins were an important legacy of earth to the United Federation of Planets. He himself was pleased that this large backlog of coins still existed, despite the fact that official Mint policy in the 21st century, had it successfully introduced the Presidential dollar coins to everyday use, would have prevented their accumulation.
He added that perhaps in an alternative time line, Americans would have found Presidential dollars convenient to use and clamored for more of them.
Stay tuned for the next movie.
Monday, May 11, 2009 5:26:20 PM (GMT Daylight Time, UTC+01:00)
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 Friday, May 08, 2009
More places to get new cents
Posted by Dave
Word came yesterday that the U.S. Mint is expanding the number of sites at which collectors will have an opportunity to acquire the second 2009 Lincoln cent design for face value.
In addition to the Indiana site that has received so much attention for a debut ceremony that will be held May 14, an event that I called a numismatic Woodstock in a Numismatic News headline, the new cents will be available on the same day in Washington, D.C., at both Union Station and in the lobby of U.S. Mint headquarters from 10 a.m. until 4 p.m. Eastern Daylight Time.
On May 15 the cents will be available in the Rayburn House Office Building on Capitol Hill from 10 a.m. until 3 p.m.
The same limits apply, though the Mint says it reserves the right to change them. What does that mean exactly? Is it simply legal boilerplate, or will the 2 rolls minimum, six rolls maximum be waived if few people show up and someone who does show up wants to back a truck up to the door?
This is probably harsh, but collectors are in a rather surly mood. The recession probably accounts for a part of this.
This mood will probably also lead someone to allege that the added availability being only in Washington is somehow aimed at aiding a select few dealers/politicians/profiteers/(insert your favorite whipping boy here).
I could be wrong. Some might interpret the Mint action as I do as a means of pushing out more coins more quickly so more people will have the chance of getting the coins faster at a lower price and the secondary market cannot run away with it to the same degree it did with the first.
A private firm would love to have the secondary market go wild, but the Mint is overseen by politicians in Congress who get complaints from constituents, so day-to-day life at the Mint is far more pleasant when things like this don’t occur.
Will we see another step toward a more placid life by making the new cents available at face value at the Philadelphia and Denver mints?
We’ll see.
Friday, May 08, 2009 2:13:04 PM (GMT Daylight Time, UTC+01:00)
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 Wednesday, May 06, 2009
Server migration blocks blog
Posted by Dave
Normally I would post a blog on Thursday morning, but this week because of a server migration issue, my ability to post anything will be blocked. This is a situation that could possibly last all day. Rather than have people wondering what happened, I figure it is better to write something now. The Friday posting should proceed normally.
Wednesday, May 06, 2009 11:09:52 PM (GMT Daylight Time, UTC+01:00)
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Go outside and play
Posted by Dave
In my younger and more impatient days, I used to think writing about the weather’s effects on numismatics as a waste of space. I didn’t care about the weather and I wasn’t interested in what others thought about the weather or how it affected them. But now that I am middle-aged, I have personally experienced the cabin fever aspect of late winter and the urge to ditch the indoors for some activity outside. I am much more closely attuned to the seasonal pattern in coin collecting. I find myself writing about it every year. We are approaching summer. Collectors have lives beyond their sets and the summertime is when many of them throttle back and plan summer vacations. If you are already thinking about your summer plans, join the club. You are a part of the seasonal hobby pattern. Commercial activity slows down. Dealers decide they can safely leave their businesses untended for a week or two to go off and recharge their batteries. In the years that the market is booming, the human tendency to want to get away is overruled by another very human tendency to take advantage of profitable opportunities that are easier to find in booms. This year the market is not booming. It seems to me that the human need to get away for awhile will have ample time this summer to express itself. After Memorial Day this trend will begin to kick in, but more likely, it will be after the June Baltimore show for coin collectors and the Memphis paper money show in late June that those lazy, hazy, crazy days of summer, to borrow Nat King Cole’s words, kick in. When the Los Angeles American Numismatic Association convention gets going at the beginning of August, I will start looking for the seasonal upturn to begin. So if you find yourself wondering what might be happening in July, perhaps it is time to plan your own getaway to refresh yourself and come back vigorous and ready to commence playing the great numismatic game.
Wednesday, May 06, 2009 1:54:54 PM (GMT Daylight Time, UTC+01:00)
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 Tuesday, May 05, 2009
Scarce enough to hoard?
Posted by Dave
April Mint production numbers have been released and those who have an interest have been focusing heavily on cents, nickels and dimes. The cents make a natural focus because of the attention being paid to the four new designs this year, the second of which will reach the public beginning May 14. Almost 230 million more have been produced, all being of the second Lincoln design. This number leaves it on track to match the output for the first design, but of course, one month's production does not guarantee a pattern any further than to confirm a Mint preference to run at a fairly even pace. Nickels and dimes are being scrutinized because there might not be any more struck this year. Through April, nickel production was just under 40 million at each of the two circulating coin production facilities in Philadelphia and Denver. Dime production is higher than nickel production, reaching almost 100 million at Philadelphia and 50 million at Denver. So what do I do? I decided to look at the Territorial quarter mintages. What do they show? In the month of April Philadelphia struck 26.52 million coins. These are all very likely the Guam design. Denver struck 19.6 million. Since there are six designs this year, that leaves two production months for each design, though striking the D.C. quarter began before the beginning of the calendar year. If the quarter numbers are half of a two-month run, Guam totals would fall from the Puerto Rican mintage totals, but by less than you might think. Philadelphia would be on track to match its Puerto Rico ouput, and Denver would drop from 86 million to roughly 40 million, or 39.2 million if you precisely double the 19.6 million April production total. May production could rise, knocking these numbers into a cocked hat, or the production rate could fall yet further, amplifying the sense of scarcity among collectors. Mintages of 40 million or 50 million quarters is a novelty for collectors because it has been almost a half century since numbers like these were the norm. Collectors being collectors will likely pay close attention to these numbers and perhaps squirrel away more of them than they should. The low 1955 output caused that year to stand out for Washington quarter collectors, but because collectors of the time were guided by the mintage totals, quite a few have survived in high grades. The 1955-D has a mintage of just about 3.2 million, but right on up to about MS-63, the prices for the coin hardly differ from issues with 10 times that mintage. Will that kind of pricing wll play out for Territorial quarters 50 years from now?
Tuesday, May 05, 2009 2:01:45 PM (GMT Daylight Time, UTC+01:00)
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 Monday, May 04, 2009
Current lesson from 1880s
Posted by Dave
Projected low mintages of U.S. coinage for the year 2009 have captured the hobby’s attention. That is a good thing. Circulating coinage used to be a base of hobby interest and that base has shriveled over the years despite the state quarter program. Collectors of my generation and older who can remember what used to be in circulation tend to be dismissive about what is currently circulating. The recession is changing that perception as the odd silver coin finds its way into fast food tills across America as cash strapped families scrape up everything they can to pay bills. But what if this is only the beginning of the trend? What if 2009 is only the first of a long series of years with fairly low mintages of current circulating coins? I ask the question because I was thinking about a possible parallel to the 1880s. That decade saw mintages fall dramatically. The Panic of 1873 began the process, but what really put the trend in place was the Resumption Act, which made 1879 a key year in American monetary history. It was in that year that the inflationary upset that was caused by the Civil War was finally pushed into history. Gold and silver coinage and paper money all became exchangeable at face value, something that had not been the case for almost 18 years. Values had been expressed in gold coin and in greenbacks and gold was the preferred medium with the lower price. Or put another way, it took more dollars in paper to buy gold dollars. This phenomenon is familiar to present-day gold bugs. In 1879, paper and gold prices converged at par. Then what happened? Well, millions of coins that had been in hiding in Canada started coming back. This coin influx continued for a long time. The result was the current coin demand was increasingly met by the returning coins and the annual Mint output fell. That explains the 1880s. What if current habits of digging out every coin you can find and returning them to circulation becomes permanent? Combine this with the ongoing increasing use of debit and credit cards and we may be entering a prolonged period where demand for new coins could be low enough to make low mintages the standard pattern. Wouldn’t it be great for the hobby if coins of recent years that could still be found in change had premiums attached to them? Suddenly the incentive to fill a Whitman album would grow from simply completing a set and the satisfaction that brings to finding key dates worth real money. That is almost enough to bring tears to the eyes of the veterans of the circulation finds era.
Monday, May 04, 2009 2:05:44 PM (GMT Daylight Time, UTC+01:00)
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