The "Buzz" Coin Blog with Dave Harper

Fourth Lincoln in pipeline
Posted by Dave

The U.S. Mint’s production facilities returned to the usual monthly pace of production in October.

Some 353.38 million coins were produced, a rate that has been adhered to most months this calendar year.

The Philadelphia minting facility cranked out 200,000 half dollars to match last month’s Denver cumulative total of 1.9 million pieces. Denver did not add to its half dollar total and it still stands at 1.9 million coins.

Cent production indicates that there are 266 million of the new Presidency cents in the pipeline as the Nov. 12 debut ceremony nears.

There were 144.4 million Denver coins struck while Philadelphia cranked out 121.6 million.

Those online speculators who are selling nickels and dimes will be pleased to see the Mint’s coining presses were quiet in October where these denominations were concerned.

There also were no Native American dollars produced in October.

Presidential dollars on the other hand saw 24.22 million pieces flow from Denver presses and 10.78 million from Philadelphia’s.

The rate of quarter production more than doubled in October from September’s level, but this was simply to return to the rate of output that was achieved in August.

Denver cranked out 20.4 million quarters and Philadelphia produced 32.2 million in October.

Overall there is little sign in these numbers of a revival in coin demand to feed American commerce.

Tuesday, November 10, 2009 2:13:55 PM (GMT Standard Time, UTC+00:00)

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Monday, November 09, 2009

Gold records and cents coexist
Posted by Dave

Gold went through the $1,100 mark fairly convincingly this morning and it certainly gives one pause to ponder the implications of the current value of the precious metal.

However, more interesting for me is the contrast that 2009 has provided for collectors.
We have seen strong gold and silver prices all year long. The counterpoint, the contrasting point, is provided by the 2009 cents.

There has been incredibly strong interest in the Lincoln cent this year. Now Lincoln cents have always been popular, but that they should become turbocharged in a year when the major market action seems to be in precious metals is somewhat surprising.

Now we have known for years that 2009 is an anniversary year and expected an uptick in interest. What we didn’t know in 2005 when the legislation was passed to authorize the four new designs was how much higher gold and silver would go.

That interest in gold and silver did not eclipse interest in cents makes 2009 feel like we collectors have a lot going on.

Many collectors suspect that the general public is still unaware of the existence of the special commemorative designs this year. That means what is going on with cents currently is almost entirely generated by the collecting population. That is unusual and we should mark this year in our memories.

Can the current high level of interest in the cent be sustained or broadened to the general public after this anniversary year is over? That will be the key test. We are lucky in that there will be a new cent design in 2010 as well.

Even if interest falls away next year or some time down the road, the memories of what occurred in 2009 with the lowly denomination will be with all of us as long as we are collectors.

Monday, November 09, 2009 2:18:50 PM (GMT Standard Time, UTC+00:00)

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Friday, November 06, 2009

U.S. Mint? Never heard of it
Posted by Dave

A number of collectors have expressed their disappointment about the Mint not striking the proof and uncirculated collector versions of the American Eagle gold and silver coins this year.

That is not a surprise. When you count on something, it is always frustrating when it disappears, even if it is only for one year.

But I am still contacted by people who do not know the difference between the standard issue American Eagle bullion coins and the collector versions of these coins, both the proof and the uncirculated “W.”

These questions usually are prompted by private ads on television offering the bullion coins for sale. The question inevitably posed to me is that if collectors can’t get their coins, who are these big boys getting theirs?

Either this means there are a lot of newcomers to the hobby and they have just joined us in this great hobby, or we have all done a very bad job in explaining the various Mint products.

A third possibility is that even after the paring that took place last year there are still simply too many products.

Now mere numbers of products do not necessarily mean there are too many. The American economy has many products of many descriptions, and people have no problem distinguishing them one from another and buying what they prefer.

This process is helped along in private industry by advertising.

A conclusion that might be drawn is that the Mint is spending too little on advertising or is not spending the funds it does expend in the right places.

Which might it be?

Friday, November 06, 2009 2:06:26 PM (GMT Standard Time, UTC+00:00)

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Thursday, November 05, 2009

Collector gets a dream assignment
Posted by Dave

How would you feel if you suddenly found yourself appointed to the Citizens Coinage Advisory Committee and had to advise the secretary of the Treasury about new coin designs?

Every collector’s dream, right?

The newest member to the CCAC, Michael A. Olson, a Pella, Iowa, banker certainly embodies that theory.

The lifelong collector was appointed to the 11-member CCAC Oct. 23 by the Treasury secretary to a four-year term.

He was nominated by the minority leader of the U.S. House of Representatives.
Olson talked to Coin Chat Radio for its Nov. 5 program.

Though he doesn’t remember what exactly sparked his interest, he began collecting coins as a kid in the 1970s. He built a collection of Franklin half dollars and perhaps unusually, managed to keep it through the high expense years of college and early family life.

Now age 46, he continues to be an active collector who visits Iowa area coin shows and club meetings on an occasional basis.

He likes the Presidential dollar series and points out that any purchase he makes that costs less than $10 is likely to be paid for with the coins.

Perhaps that is why the American Bankers Association made him a member and acting chairman of the Presidential Dollar Coin Working Group. As a collector and a banker, he clearly believes in his mission.

Olson also doesn’t want to put a foot wrong. He knows he will be working with 10 other people who have distinguished backgrounds and expertise, but he does admit, “It would be nice to have input while I’m on the committee.”

He is a lieutenant colonel in the Iowa National Guard and as such he hopes that there will be more military themed commemorative coins in the future, but is very low key about his personal design and theme enthusiasms. He doesn’t want to do anything to mark him out as not a team player.

Many collectors might not be so restrained, but that is probably why Olson has made it to the CCAC and been given the chance to help shape coin designs for the next four years.

I am envious. Aren't you?

Visit www.CoinChatRadio.com for the full program.

Thursday, November 05, 2009 2:04:08 PM (GMT Standard Time, UTC+00:00)

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Wednesday, November 04, 2009

What is it about that Lincoln set?
Posted by Dave

I just received an e-mail from a reader who said until the Lincoln Coin and Chronicles set came along he had not ordered anything from the U.S. Mint for years.

“This set is superb and flawless. The set design is very impressive. I was ready to abandon coin collecting for many of the same reasons your readers have expressed in the last few months. This experience may change my mind.”

It is certainly impressive when one single issue grabs you and pushes you to an action that is the very opposite of what you have been contemplating.

What precisely was it about this set that got his attention? He didn’t say.

He could have ordered the proof Lincoln commemorative dollar by itself last March. He could have ordered the proof Lincoln cents as a set in August.

It took the combination to get him off dead center.

Was it the 50,000 number? Could it simply be the allure of something that might be scarce?

Packaging perhaps?

We will never really know. Every collector is different, yet every collector is the same. Something just gets under our skin so that we have to act.

Putting a collection together is simply acting again and again.

I wish him well in reconnecting with whatever it was that got him into the hobby in the first place. The Lincoln set is a wonderful first step in a walk back down that road.

Wednesday, November 04, 2009 2:03:23 PM (GMT Standard Time, UTC+00:00)

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Tuesday, November 03, 2009

Buffalo orders start strong
Posted by Dave

Gold proof one-ounce Buffalo coin sales got off to a strong start.

In the first three days since orders began being accepted by the Mint on Oct. 29, collectors ordered 19,600 coins. There was no individual order limit imposed.

This number already equals the total number of the 2008 proof one-ounce Buffalo pieces sold.

It is possible that there are some fairly large orders in that total to help make the strong start, but offsetting that possibility is the fact that the Mint is not scheduled to begin its bulk sales program until today. I would expect the order numbers to jump quite a bit higher in percentage terms in the coming week.

Buyers paid $1,360 apiece for the privilege of owning the famous James Earle Fraser design originally used 1913-1938 on the Buffalo nickel.

To look at this initial order number from another perspective, I looked back at the opening of sales for the Saint-Gaudens Ultra High Relief gold $20. Collectors overloaded the Mint’s Web site and phone lines for that offering.

During the first four days Jan 22-26, sales of the UHR reached 40,727. Buyers paid $1,189 for those coins due to the lower price of gold at the time and orders were restricted to one per household.

Buffalo coin demand did not back up the phone lines or cause computer problems. Everything seemed to work as the Mint and collectors would wish it to work.

By my calculations demand averaged over 6,500 a day for the Buffalo as compared to the slightly more than 10,000 a day for the UHF. That’s pretty darn good for the fourth year of the design.

As time goes on, of course, the rate of orders will plunge, much as it already has for the UHF. Those first four UHF days generated 40 percent of the total sales so far. That is pretty concentrated and it is a buying habit that has been characteristic of collectors since I began ordering from the Mint over four decades ago.

Tuesday, November 03, 2009 2:18:27 PM (GMT Standard Time, UTC+00:00)

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Monday, November 02, 2009

Sitting on top of the poll questions
Posted by Dave

Apparently I should never ask collectors if they had a good year if I want to get a large number of responses in the Numismatic News weekly poll question.

Fortunately for me and for readers of Numismatic News, those who did respond gave it some deep thought and spent some time writing answers that are longer than what the usual yes and no questions generate. The results went into the Nov. 10 issue that was mailed on Friday.

I am grateful to those who did reflect on this year. It has been a crazy one because of the financial crisis and yet the pattern of the last 10 months is not so very different from a typical year.

Collectors proved themselves to be resilient.

The poll numbers themselves showed that more than half, 57 percent, considered themselves to have had a good year.

That’s not bad if you wonder when the next bank failure, layoff or tax proposal will hit you between the eyes.

To generate large numbers of responses this year, it seems far better to ask whether collectors have an interest in purchasing something. Then the responses flow. This week’s question about the Medal of Honor commemoratives seems to already be proving this.

If I could have asked about Lincoln cents every week without boring collectors, that probably would have generated the most replies, for when I did pose questions relating to the new Lincoln cents of 2009, the answers just poured in.

Lincoln still has got that old magic over collectors. That’s a good thing overall even if there have been some sour moments at the long waits to obtain the new designs in circulation.

But that is all part of routine collecting. If it were easy to get everything all the time, collecting would lose much of its appeal.

And if it were easy to generate poll question responses, then those would probably lose much of their appeal as well.

Monday, November 02, 2009 2:09:06 PM (GMT Standard Time, UTC+00:00)

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Friday, October 30, 2009

Collector American Eagles might be likely in 2010
Posted by Dave

Collectors are still complaining about the lack of uncirculated “W” mintmarked and proof American Eagle silver coins this year due to the planchet shortage that has plagued the U.S. Mint since the middle of 2007.

Next year looks like a far easier time will be had by the U.S. Mint if an Austrian Mint forecast about 2010 is borne out.

I was reading Jon Nadler’s posting on the Kitco Web site yesterday. http://www.kitco.com/ind/nadler/oct292009.html#at

There he quoted the President of the Austrian Mint, Kurt Meyer, on the topic of how many one-ounce Philharmonic gold bullion coins his institution will produce.

Meyer’s forecast is a decline of 32 percent.

Since gold does not exist in a vacuum, such a significant decline would likely also be accompanied by a decline in demand for silver American Eagles.

Anything approaching a 32 percent decline would free up some 8 million silver planchets, a number large enough to accommodate any likely demand for the collector version of the silver American Eagle.

Will it happen?

Business forecasts are just that. But a forecast from an institution with the experienced staff of the Austrian Mint certainly has a far higher probability of being correct than those made by many other prognosticators one finds active today.

So, the one-year gap in the American Eagle series will be the focus of questions that will be sent to Coin Clinic by newcomers for the next 50 years much as they ask why there is a much longer gap in Morgan dollar production that stretched from the years after 1904 until production resumed in 1921.

Friday, October 30, 2009 1:19:02 PM (GMT Standard Time, UTC+00:00)

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Thursday, October 29, 2009

Adult facts beat kid fiction
Posted by Dave

Romantic stories help sell coins. No, these aren’t of the Barbara Cartland type, but if the misty romantic past type when life was supposedly more adventurous or simply better.

I thought of this as I noticed that in the Stack’s 74th anniversary sale scheduled for Nov. 9-11 in Baltimore that there is a Confederate cent.

Now the Confederacy never issued cents. This is a pattern created by Robert Lovett Jr. for the Confederate government.

Nevertheless, this is one of those issues that yarns can be built around. These yarns were particularly compelling for me when I was a kid and we were marking the centennial of the Civil War.

Why a Confederate cent could have been given to the father of a friend’s granddad who was charged with getting it and other valuables out of a burning Richmond in 1865.

Wild fantasy? Of course. But it has kid appeal.

There is something fitting about this cent because it is belongs to Q. David Bowers. He knows the value of a good story. It has helped him sell coins for his entire career.

More importantly, his stories are meticulously researched history.

You know what? That history is even more exciting than the yarns of childhood.

Why?

Because as a responsible adult I know Bowers' stories are true and I find them just as exciting as the lies my friends and I swapped as kids.

Thursday, October 29, 2009 12:59:38 PM (GMT Standard Time, UTC+00:00)

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Wednesday, October 28, 2009

Inflation poor guide to future coin values
Posted by Dave

I received an e-newsletter that mentioned inflation and coin prices. Many people believe there is a connection. There really isn’t a direct connection, but to explain can seem more like a word game.

Most coin prices depend on average collector incomes and the willingness of these collectors to spend that income on certain coins.

Both factors fluctuate or change and inflation plays a role in what people are paid, but the link is not direct.

The prices of many coins that were hobby staples in the 1960s simply sat or declined during the 1970s even though active collectors had more money in the 1970s because of inflation. Some coins are still at or below 1960s levels.

The nature of collecting was changing. It always does. Attention was redirected to new areas. Morgan dollars really came into their own in the 1970s and built up quite a following right on through the market peak in 1989. Prices nowadays for many of those coins are lower than they were then despite 20 years of inflation.

On the other hand, key coins like 1804 dollars and 1913 nickels have actually outpaced inflation as the prestige factor of owning the great rarities helped incite buyers to want to own these numismatic masterpieces.

Online registry sets give certain coin prices a nice boost as certain collectors compete to buy the best. This creates a phenomenon where the prices of a couple of coins at the top end of the grading scale go through the roof while those pieces in the more affordable end of the uncirculated scale simply languish despite inflation.

A few Lincoln cents that any collector can buy for a dollar or two in BU or proof have brought tens of thousands of dollars because they happen to be the coins pronounced to be the best of the millions or billions that exist.

The problem with the great rarities and coins in the very top grades is that almost nobody gets to play in that park. Action in this park makes headlines and creates numismatic history, but it does not help the average coin buyer make any money.

Coin buyers who are not guided by their innate interest in collecting specific series or type sets must be able to pick out coins that will appeal to collectors at the future date they will wish to sell and in a grade those future collectors will wish to buy. That isn’t easy. Inflation won’t overcome mistakes.

The obvious area to point to today for success is that occupied by gold coins. The price of gold has risen dramatically from the government controlled $35 an ounce that prevailed 1934-1973. Prices for coins valued for their metallic content have soared beyond what inflation would have mandated, even if you go back to 1933.

The general price level is up about 12 times since 1934. That would put gold at $420 from its $35 starting point, but whatever number you pick, it seems that gold’s price has outpaced inflation at the moment.

So, while inflation is a factor in the eventual price of coins, it is not the only factor. To buy any coin simply on the basis of expected future inflation can easily lead to disappointment if the past is any guide.

It is far better to be a collector. Your odds of buying the right coins improve and you have fun doing it.

Wednesday, October 28, 2009 1:24:48 PM (GMT Standard Time, UTC+00:00)

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