The "Buzz" Coin Blog with Dave Harper

Chomping at the bit
Posted by Dave

This has been a year where many in the hobby have wanted something or expected something to happen only to have to wait far longer to see it fulfilled.

In the Internet Age, patience is no longer a virtue or even acceptable. Rapid fulfillment is the expectation and anything less grates.

So, we have been waiting for gold to touch the inevitable $1,000, but have been teased relentlessly but not seen much fulfillment. We haven’t had a close above $1,000 since February and yesterday disappointed yet again.

Then there are coin deliveries from the Mint. When the Ultra High Relief $20 went on sale in January, stated delivery times ballooned and then contracted. Some buyers were livid.

Many hobbyists waited for the release of the new Lincoln cent designs only to find that the banking system was broken and the usual pipeline from Mint to customer was going into reverse as people and businesses desperate for cash took fewer coins or even sent coins back to the Federal Reserve System. Only in the last few days have collectors in some parts of the country reported all three 2009 designs in their change.

The run on bullion American Eagle coins has kept the Mint to the production of just the one-ounce gold and silver version. The proof collector versions have been long awaited and are still expected in the fourth quarter.

I could cite other examples, but the pattern of 2009 has been clear. Waiting has been the name of the game. It does no good to report that collectors in the past waited far longer and the old hobby self-help efforts that used to kick in nowadays are viewed as either terrible impositions or part of some sinister plot to enrich dealers at the expense of the little guy.

Will collector patience ever return?

I guess we’ll have to wait for that too.

Wednesday, September 09, 2009 2:04:02 PM (GMT Daylight Time, UTC+01:00)

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Tuesday, September 08, 2009

Of gold and unbacked notes of the past
Posted by Dave

Look at gold. It has broken through $1,000 a troy ounce for the third time. This will bear watching going forward, but having just finished a holiday weekend, my mind has been looking backward rather than forward.

A family gathering took me to St. Paul, Minn. It was a great time to catch up.
I took a look at Prosperity Heights grade school that I started kindergarten at 49 years ago this month. It looks remarkably unchanged except for what appears to be a gymnasium addition.

I have many memories from the place that I left in the middle of second grade. I remember the whole school watching the liftoff of John Glenn, who then became the first American to orbit the earth in 1962. A number of televisions had been placed at various spots in the halls.

Hobby wise, I date my coin collecting days as starting after I left the Twin Cities, though I do have one numismatic item from that time.

My father thought $2 bills were a curiosity that I should be aware of. He gave me one. I thought it was so neat that I have kept it all these years, though once or twice I used it in my young years as collateral for a loan from my father in anticipation of future allowance income.

My father was an accountant who wanted me to be aware of how the world of finance worked.

The note is a Series 1953 Red Seal, which is another name for a United States Note. This series was a legacy of the Civil War when the Union was forced to issue paper money that had no backing of gold or silver.

The U.S. Note issuance came to be frozen at $346 million and was not finally abolished until the 1990s. By that time, it was irrelevant to the economy and its issuance was a fiction. $100 U.S. Notes were moved around from an unissued vault at Treasury to a vault that had the designation as “Issued.”

But in my childhood, you could find $2 and $5 U.S. Notes in change if you watched closely. I obtained a $5 years later when I was a paperboy.

It is perhaps appropriate to discuss unbacked paper money from former times as a counterpoint to the present unbacked notes and gold’s price reaching four digits.

Tuesday, September 08, 2009 2:01:41 PM (GMT Daylight Time, UTC+01:00)

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Friday, September 04, 2009

Will you win the Mint lottery?
Posted by Dave

Though specific release date and price are not yet known, the pending sale of the Lincoln Coin and Chronicles set in the middle of October looks like a certain sellout.

The set is limited to just 50,000 because that is the number of proof Lincoln
commemorative silver dollars that were set aside for inclusion. The commemorative dollar sold out rapidly early this year.

A proof set comprised of just the four Lincoln cents sold more than 66,000 in the first five days of sales. That seems to indicate a huge and ready reservoir of collector demand for the Lincoln Coin and Chronicles proof set.

The key difference will be price.

The four-cent proof set is just $7.95. The set with the silver commemorative will be priced somewhere in the neighborhood of $50.

Will the much higher price deter many buyers?

Ordinarily it might, but offsetting that is the likelihood that many buyers will view the set as a sure winner on the secondary market. The proof dollar is currently trading on the secondary wholesale market over $50.

Of course, the Mint could slow things down a bit by putting a shockingly high price on the set. I would expect this not to be the case, though.

A sellout will bring excitement to the hobby. It will also bring complaints. Some collectors, even those who know the situation ahead of time, will gripe about not being able to buy a set if there is a crush of demand that outnumbers the 50,000 maximum sales number.

It makes me wonder why there aren’t more complaints from the public every time someone buys a lottery ticket that fails to win.

Friday, September 04, 2009 2:02:15 PM (GMT Daylight Time, UTC+01:00)

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Thursday, September 03, 2009

When hot market premium disappears
Posted by Dave

Gold coin prices only go up, right?

This is a good day for a timely reminder that they can and do go down.

I had an exchange of e-mails from a longtime reader of Numismatic News yesterday.

He wrote: “What is happening w/the price of gold at the coin shows? It shows that the price is up but the dealers don’t want to pay those prices. I took a $1,200 loss on a double eagle I recently sold at the Florence show here in Oregon over the price I was offered last year at this time when gold was down.

I responded: “Supplies of gold coins were so tight last year because of investor demand that premiums on common date collector gold coins were bid up. You did not tell me the date, but I surmise by the price action that it must be a common date.”

The reader was philosophical about it, which shows a long-term outlook on things.

He wrote back to me: “The double eagle was a 1909-S, MS-63 grade. It was graded by a local dealer whom everyone knows and trusts. Last September I turned down an offer of $1,850 for it as I wanted $2,000. Before this last show I noticed that the price had skyrocketed to $2,200 for that coin and I was certain I would get the $2,000 this time, but to no avail. I guess the adage ‘you snooze, you lose’ is more than true in this case.”

It is important to remember that premiums on gold coins are not fixed. They rise and fall with the market. When buyers can’t get enough of the coins, they rise. When the numbers of sellers increases, premiums fall.

The 1909-S Saint-Gaudens $20 is one of the most common dates out there. Its price except at the ultra high grade end always returns to a smidge above melt value.

Fortunately for the writer, one coin is a lesson. I would hate to think of the outcome had this involved multiple coins representing his retirement funds.

Thursday, September 03, 2009 1:59:19 PM (GMT Daylight Time, UTC+01:00)

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Wednesday, September 02, 2009

Last hurrah or new dawn?
Posted by Dave

In the first eight months of 2009, the Mint has struck 18,764,500 silver American Eagle coins. That doesn’t seem like a large number to a generation of collectors who came to hobby maturity in the period after the Coinage Act of 1965, when mintages in tens of billions became the norm.

It is instructive from time to time to get perspective. I was looking through the mintage figures for the Morgan dollars. There are only seven pieces by date and mintmark that have higher individual mintages.

Of those, only the 44,690,000 1921 Philadelphia Morgan total seems unlikely to be surpassed by the time the final 2009 American Eagles are struck and sold to eager bullion investors.

That is interesting. The Mint’s current output is in the same league as the Morgan dollar from its heyday. Output demand is also for the same reason: Americans are uncertain as to what properly should be considered money and what shouldn’t be.

Prior to 1900 when the United States formally adopted the gold standard, silver was considered a monetary metal, albeit an inferior one to gold.

Farmers and other debtors liked its relative plentifulness and looked to the silver dollar and its paper money cousin, the Silver Certificate, to help ease the burdens of their debts.

The New York monied interests looked in horror on silver because at the time it signified expansion of the currency – another name for inflation.

They wanted their repayment of principal and interest in good, solid, uninflated gold.

The monied interests basically got their way, but not before a huge outpouring of Morgan dollars built up the supply of dollar coins. It was no accident that production basically stopped after 1904. Silver had been demoted officially and demand for silver dollars declined with its change in status.

The large mintages of 1921 did not signify any return of status to the silver dollar but an effort to replace rapidly 270 million that were melted in 1918. But even then, it took until 1928 to meet that total.

The American Eagle, like the Morgan dollar, is a product of a generation that is trying to figure out what it wants from money.

Will American Eagles be considered the last hurrah for coinage of precious metals, or the first step taken in 1986 to return to a precious metal based currency?

Wednesday, September 02, 2009 2:56:56 PM (GMT Daylight Time, UTC+01:00)

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Tuesday, September 01, 2009

Sit up straight or you aren't good as gold
Posted by Dave

Yesterday, the U.S. Mint raised the ceiling on the number of Ultra High Relief Saint-Gaudens $20 gold pieces that can be purchased per household from 10 to 25.

The limit had only just been raised from one coin to 10 on July 27. This first action after six months of sales where the limit was just one coin occurred after the Mint had given every collector who wanted one the chance to buy one.

This policy assured the widest possible distribution and certainly collectors did not complain of lack of fairness in distribution.

But collectors being collectors hit upon something else to complain about: the lack of a requirement to sign for the orders that were shipped January through early March. The Mint changed delivery policy in March.

No coins were ever reported by my readers as being stolen as the result of the earlier delivery method, so the complaints to the Mint probably grated a little.

Mint staff probably felt like a teenager being told by an elderly aunt to not talk with their mouth full and to sit up straight at the table. The advice is good and correct, but not conducive to family bonding.

Tuesday, September 01, 2009 2:05:01 PM (GMT Daylight Time, UTC+01:00)

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Monday, August 31, 2009

How will our design artwork be judged?
Posted by Dave

The Mint said Friday that it was looking for up to six new artists to be designers in its Artistic Infusion Program.

That’s a good thing.

The new designs that have been created in the last 10 years for the various quarter programs, the nickel redesign and the current four commemorative designs on the cent will be the evidence that future generations will examine to determine what sort of period the United States was experiencing in its numismatic art.

Will we be judged by our posterity as was the period 1907-1917 as being a time of great creativity, or will we be condemned for our modern tendency to grab old designs?

The Ultra High Relief gold $20, the Buffalo gold bullion piece and the earlier Buffalo commemorative silver dollar may be beautiful designs, but they are the product of plundering our artistic past rather than being an expression of our own generation’s artistic creativity.

I know there is a sense among some collectors that any old design is superior to anything new. I think that is unfortunate. It shows a timidity that we will be heartily condemned for.

We could be viewed like the kid in the back of the class who hopes the teacher won’t call on him because he didn’t do his homework.

I hope that won’t happen. Certainly the sheer numbers of state quarter designs give this generation some artistic claims of its own.

Monday, August 31, 2009 2:12:26 PM (GMT Daylight Time, UTC+01:00)

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Friday, August 28, 2009

Where did summer go?
Posted by Dave

Though the Labor Day weekend is still a week away, I can’t help but look at the calendar and see that August is almost over.

I have the usual wistful feelings, but I also feel an excitement start to build. With the beginning of autumn comes the autumn collecting season.

Business activity picks up. News activity picks up. The show calendar in Numismatic News requires more and more space to list all of the events that are held in a three-week period.

Yes, I will miss the usual outdoor summertime activities, but the advent of the fall collecting season is like coming home, or reconnecting with an old friend.

At root, it’s what I do.

Fortunately for me, it is also what a lot of other people do and have done for many years.

Nothing can change the fact that collecting is an indoor pursuit. It is something to do after the chasing around of summer has been completed and a different form of relaxation is required.

Summer is going away again. But now that’s old news.

Bring on that coin collecting season.

Friday, August 28, 2009 2:08:21 PM (GMT Daylight Time, UTC+01:00)

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Thursday, August 27, 2009

Coin of the Year time
Posted by Dave

The nominating panel for the Coin of the Year Awards meets next month here in Iola, Wis. It will review submissions of 2008-dated coins for consideration for the awards that will be given at the World Money Fair in January 2010 in Berlin, Germany.

It is an interesting process, but in the first instance it requires that individuals and issuing mints make nominations and get them to us here at the home of World Coin News, the sponsor of the awards since they were first given in 1984.
Lisa Bellavin is coordinating these submissions for the panel. Her e-mail is Lisa.Bellavin@fwmedia.com.

Anyone can make a nomination in any form, but to be truly useful to the panel, please try to include an image if you can and as much of the descriptive information as possible: denomination, weight, composition, diameter, etc.
The fun part, of course, will occur when voting begins online for the People’s Choice Award.

But first, help us to assemble the list of choices.

Send in your nominations.

Thursday, August 27, 2009 2:07:27 PM (GMT Daylight Time, UTC+01:00)

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Wednesday, August 26, 2009

Whistling past the graveyard
Posted by Dave

Nobody likes bad news. Nobody likes to be tagged as the bearer of bad news. That is what makes it so hard to deal with the current soft market in coins.

The market is down from its peaks in 2007 and 2008. But it is hard to quantify.

Better coins simply stop trading when business conditions weaken. Those that do trade can still generate headlines.

Then the chorus sings, “See, the market is still strong.” But is it?

It is to make this determination that I await more definitive evidence.

I remember the serious recession we had after the peak of the market in 1980. We had an internal debate at Numismatic News as to what we should do with the coin prices listed in Coin Market.

Instead of outright price declines, dealers just refused to purchase coins.

Instead of saying it in some straightforward manner that they could not resell the pieces at current price levels and taking a pass, dealers began to say that the coins didn’t make the grades they claimed to be. Coins that were MS-65 at the peak of the boom were suddenly -64, then -63, etc.

This infuriated the owners of the coins. While they would feel the injury of not being able to sell some coins when they wanted to, they also suddenly felt the sting of being told in an offhand fashion that they somehow had purchased overgraded coins.

Thems fightin’ words in this here business.

Bad feelings multiplied. Dealers began haunting the room where the American Numismatic Association board of governors met. They were the official keepers of grading standards. They were finally forced to declare in 1985 that grading standards had changed.

This gave everybody a black eye.

Wouldn’t it simply be easier to adjust prices downwards in a slow market?

We didn’t in the early 1980s. I won’t hold my breath waiting for it now.

Wednesday, August 26, 2009 2:07:04 PM (GMT Daylight Time, UTC+01:00)

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