The "Buzz" Coin Blog with Dave Harper

Treasurer misses chance
Posted by Dave

Call me cranky this morning. Perhaps it is residual jet lag from my trip to Berlin. But I am reacting negatively to ostensibly good news.

I was notified by the Bureau of Engraving and Printing that the new Series 2009 $1 Federal Reserve Notes would be ceremonially introduced Feb. 9 at the Fort Worth note printing plant.

Treasurer of the United States Rosie Rios is leading what is called a “Push the Button” event to get the presses rolling.

Every new administration marks the event of new currency series in some way. This is certainly appropriate.

Paper money collectors have been waiting since last year for this to occur. Other administrations have gotten the event out of the way within weeks of taking office.

Of course, other administrations did not have a financial crisis to tend to as they were sworn in.

But I cannot help but feel that BEP missed the boat in its scheduling. Next month the American Numismatic Association will have its convention in Fort Worth.

How appropriate it would have been if ordinary collectors could have had the opportunity to go, or at least enjoy the idea that our government officials consider them important enough to schedule such an event when they are in town.

BEP has been very supportive of ANA in terms of having its booth at the conventions, so I know there are people there who are aware of the schedule. I assume the decision was made further up the chain of command.

However, just returning from Germany, where the head of government gave 15 minutes of her precious time to kick off a national coin issue as the World Money Fair was being held there, it makes me think that just a little coordination in this country would have yielded major benefits for the government and the BEP collector client base that it has worked so hard to cultivate.

Thursday, February 04, 2010 2:08:32 PM (GMT Standard Time, UTC+00:00)

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Wednesday, February 03, 2010

Big hopes ride on big numbers
Posted by Dave

One of the goals that U.S. Mint Director Ed Moy set for his trip to the World Money Fair in Berlin last week was to find “pockets” of planchets to meet the continuing heavy demand for gold and silver American Eagles.

It is to be hoped that he was successful. The future of the proof and uncirculated “W” collector versions of the American Eagle gold and silver coins hinges on the outcome.

For the silver Eagle, the Mint had a magnificent January. It sold 3,592,500 coins. This compares to 1,900,000 in January of 2009, a year, which during the summer, the Mint briefly did catch up.

Is this an augury of successful catch-up in 2010?

It could be, but January is a peculiar demand month because so many buyers are not the usual investors, but rank and file coin collectors who want the new date as soon as they can get them.

February sales will probably give us a clearer picture as the collector demand is satisfied.

The gold sales number does not particularly stand out. In January 85,000 were sold as compared to 92,000 in January 2009.

At first blush, you might think that the Mint is falling behind, but then when you consider it had 51,000 2009 coins left over in January, it would seem that overall demand is a little bit weak. If this is the case, the Mint is closer to catching up with the gold American Eagle than we might realize.

Wednesday, February 03, 2010 2:03:40 PM (GMT Standard Time, UTC+00:00)

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Tuesday, February 02, 2010

'Generation Billions' meets downsized mintages
Posted by Dave

Mint production continues to slide. The figures for January, while up from zero in December, show that only 218,410,000 coins were struck.

The bulk of the mintage was in dollar coins that the public doesn’t want or need and new one-cent coins that the public does not need but collectors are anxious to find because they have a new reverse design.

There were 74.48 million Presidential dollars struck, which seems to indicate that the Mint remains on the path of building up an excess supply. Of course, the design has changed, as we have entered the fourth year of the Presidential program.

Native American dollar production amounted to 25.2 million coins.

Cent production totals were 115,230,000 in January. Denver came in with an even 50 million and Philadelphia chipped in 65,230,000 pieces.

With the early reports of the coins emanating from Puerto Rico, the hobby knew the new cent coins were in the pipeline, but where else they will turn up besides the coin exchange in Springfield, Ill., Feb. 11 is still mostly a mystery.

A mintage of 3.5 million half dollars provided the Mint with enough coins to get the 2010 bag and roll quantities out there. This was divided as 1.7 million coins from Denver and 1.8 million coins from Philadelphia.

No nickels or dimes were struck.

There are also no quarters. This might strike collectors as strange, but word from the World Money Fair in Berlin is that the release date for the America the Beautiful quarter series will be in late April.

Design work apparently lags because of the original lateness of the congressional authorization, giving the Mint less than its optimal lead time.

Do these mintage numbers seem strange to you in any way?

As a collector who grew up as part of “Generation Billions,” these totals seem tiny.

Tuesday, February 02, 2010 5:00:51 PM (GMT Standard Time, UTC+00:00)

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Monday, February 01, 2010

No firm cent ground to stand on
Posted by Dave

The fifth World Money Fair to be held in Berlin is now history and I am on my way back to the United States. There are many things on my mind as I try to digest what I have experienced over the past week.

A conversation I had with a blank supplier was most interesting. We were talking about the most recent news that it cost 1.61 cents to make a U.S. cent and a bit over 6 cents to make a nickel in fiscal year 2009.

What were the U.S. Mint's options, I asked?

Bottom line, the reply came, was the Mint probably just has to live with it.

The only cheaper alternative was some sort of coated steel planchet, copper coating for the cent and nickel coating for the nickel. These would be cheaper, but in the case of the cent, it would still cost more to strike the cent than face value. However, even to make this change, the Mint would be taking on a future problem. Apparently, when coins of this composition need to be retired, there is no easy way to dispose of them. Metal recyclers do not like coated steel blanks. It is just not commercially feasible to do it. That makes the coins little more than trash for a landfill and that is not the most environmentally sound thing to do. This hasn't stopped countries from using this type of blank, though.

The supplier recounted a story where one place used retired unrecycled coated steel coins as footings in a small construction project to get rid of them. That is not something that could be done in the United States on a large scale or perhaps any scale at all, so why create the problem in the first place?

So the problem of what to do with the cent and the nickel will probably persist for years.

"You can't very well drop the cent, now can you?" I was asked rhetorically. "If you do that, you might as well go and add a zero to the currency."

With all of the inflation fears out there, even a hint of such an outcome would be enough to prevent any boat-rocking actions with the cent.

Monday, February 01, 2010 2:00:33 PM (GMT Standard Time, UTC+00:00)

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Friday, January 29, 2010

South Africa in the spotlight
Posted by Dave

Yesterday was dominated by activities involving South Africa at the World Money Fair in Berlin. That is fitting because the nation that hosts the World Cup soccer matches this summer is the guest of honor at this year's show.

In the morning, mint directors were taken to the Berlin Mint for the striking of the first of 600 2010 South African Krugerrands with the Berlin Mint's bear mintmark. The bear is also the symbol of the city and you see it in many places around the city itself.

Doing the honors was the ambassador of South Africa to Germany.

In the evening, the ambassador hosted a reception at the South African embassy for the numismatic group. He called coins the silent ambassadors of countries, transmitters of history and culture and silent witnesses of our times.

Guests at the embassy were also treated to a 20-minute dance done by Tchekpo Dan Agbetou. He is originally from Benin, was educated internationally and now runs a dance school in Bielefeld, Germany, where students learn traditional African dances as well as modern dances including Old School and New Style Hip Hop.

The dance was followed by a contest among a few guests who admitted that they did not know what a traditional trumpet was that was used to make a sound like an elephant. I did not catch its name, but the short contest had the guest try to make a sound. Some could. Some could not. After the audience clapped for each guest, reducing the field to four, a second round was held in which Albert Beck, founder of the World Money Fair, was declared the winner, the prize being a small gold coin.

Between the two events, the show was set up. Today the show opens and the real work begins.

Friday, January 29, 2010 2:12:35 PM (GMT Standard Time, UTC+00:00)

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Thursday, January 28, 2010

'I'm a numismatist and I cannot lie'
Posted by Dave

The Royal Canadian Mint hosted a reception yesterday. It was an event where all of the attendees could relax a little and have conversations with their counterparts around the world. It was pretty standard fare until a special performance was given by four of the mint's employees. Trish Santos, Manon LaPlante, Ian Graham and Jocelyn Desy wrote their own numismatic industry lyrics to an old rap song and then presented the result on stage dressed in clothing from the 'hood. The audience ate it up. It was great fun to watch them bust a few moves.

Individuals I talked to expressed optimism about the market for new coins. Of course, mints trying to sell coins to collectors always have to be optimists.

The major increases in the bullion coin market have had their effect on collector buying attitudes. Bullion coins generally have very low markups over bullion value. Buyers have every incentive to buy their precious metals in the cheapest fashion possible. This cost consciousness is apparently spilling over into collectible purchases. Mints have to watch their pricing points very closely.

For a U.S. collector, new world issues always seem expensive. The U.S. Mint pricing spoils them. Where the U.S. Mint might want a 35 percent markup for something, world mints routinely take double bullion value for their collectible offerings.

Today is officially the set-up day for the show, but so many meetings are scheduled in the conference rooms all week that it is fair to ask whether the official start isn't just icing on the cake.

Thursday, January 28, 2010 1:58:40 PM (GMT Standard Time, UTC+00:00)

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Wednesday, January 27, 2010

Spain could follow in state quarters' footsteps
Posted by Dave

My mind says 'sleep,' but the clock says 'work.'

While Europe is shivering in the cold outside, I am more concerned with the usual effects of jet lag inside. While the clock says it is morning, my body tells me that it is the night before as the seven hour-time difference between Berlin and Iola, Wis., has not yet been rectified. This has not stopped the four of us who traveled here from Krause Publications from getting to work.

My publisher, Scott Tappa, and associates Tom Michael, Lisa Bellavin and I met with officials of the Spanish Mint Tuesday night at the Estrel Hotel. The place is already beginning to fill up with officials from various world mints. We are all here to attend the World Money Fair.

There were a number of issues that were raised in a wide ranging discussion, but perhaps the most interesting was the revelation that Spain is considering a program inspired by the United State's state quarter program. The country would issue a 52-piece series of silver proof coins to honor the provinces of Spain. The coins would be based on the historical monetary system as well as the current euro system. The coin would be denominated as a 5-euro coin, but would also be a 4 reales. In the old Spanish system on which the U.S. dollar is based, the 8 reales is a silver dollar sized coin and 4 reales would be half dollar size. It would be 13.5 grams in weight, or half the size of the old 8 reales and the correct weight for the old 4 reales.

The obverse design of the new coins would change as well as the reverses. The country name would be the unifying element on the obverse, but otherwise it would bear the coats of arms of each place. The reverses would depict scenes typical of each place. The country name might be done in a combination of raised letters and recessed letters to create an interesting visual effect.

The coins would be issued much more rapidly than the U.S. series, as the program as currently envisioned would run for just five years. There would also be no circulating coin component.

No final decision has been taken as yet to go forward.

Wednesday, January 27, 2010 1:49:25 PM (GMT Standard Time, UTC+00:00)

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Tuesday, January 26, 2010

Berlin the place to be seen
Posted by Dave

The World Money Fair begins later this week in Berlin. There is no other numismatic event like it. It is as much a trade show for world mints as it is a coin show for collectors.

Collectors don’t mind sharing space with mint officials. I have never asked a world mint official if they mind sharing space with collectors.

The fact that the mints go back again and again probably is proof that the officials think it appropriate to rub elbows with their clients.

For Americans attending, the most startling element of the show is the fact that you cannot see across the floor. For American coin shows security is extremely important. Shows are set up so security personnel have a line of sight across the entire floor. No such line of sight exists at the World Money Fair. It looks more like a spring boat show except with coining presses and colorful background displays taking center stage.

This is not to say that there is no security at the World Money Fair. It is simply different.

To make a long story short, the World Money Fair is an important place to be. It has become the venue for giving the Coin of the Year Awards. This will be the third year in which my colleagues and I present the awards there. It should be exiting when it happens on Saturday.

I am in transit. Wednesday should be my first full day in the German capital if all goes according to plan. It is “try to get over jet lag day,” though that shouldn’t stop me from visiting a couple of museums with Standard Catalog staffer Tom Michael.

Tuesday, January 26, 2010 2:04:24 PM (GMT Standard Time, UTC+00:00)

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Monday, January 25, 2010

Cent proves even air is expensive
Posted by Dave

With all of the problems on the plate of the Obama Administration, it is not too likely that priority status will be given to the problem of what to do about the cent and the nickel.

The Mint’s annual report, which covers fiscal year 2009, which ended Sept. 30, 2009, shows that even with dramatic declines in the prices of copper, zinc and nickel, the Mint still loses money on each coin it makes.

For the cent, the cost problem actually got worse. This is due to the fact that total mintages have plunged so dramatically. The overhead assigned to each coin goes up as the number made goes down. In the present economy, it doesn’t look like there will be an improvement any time soon.

It currently costs 1.61 cents to make a cent. The metallic value is roughly 0.61 cents, so overhead adds another cent. To make a ridiculous point, if the Mint made the present number of cents out of absolutely nothing, it will still cost them a cent to produce them.

Not a pretty picture when looking for alternative compositions.

It appears that the only rational choice is to abolish the denomination, but you know that will not happen.

For the nickel, the problem remains the high cost of copper and nickel. In 2009 it cost the Mint 6.05 cents for every nickel it made. A less valuable composition would make the denomination cost effective.

When will the compositions of the cent and nickel arise again? There is no way of knowing this with certainty. There is no advantage in an election year for either party to bring the issue up at all.

The irony for the nickel is that presently its face value equals its metallic value, a circumstance that hard money advocates want for all American coinage.

Monday, January 25, 2010 2:08:37 PM (GMT Standard Time, UTC+00:00)

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Friday, January 22, 2010

First 2010 cent reported
Posted by Dave

Drum roll, please.

The first report of a 2010 cent to be found in circulation came to me yesterday.

Collectors are eager to see the new Shield design to see how it compares to the line drawing we have been using to illustrate it during the last couple of months.

Bill Gray, a snowbird from Pennsylvania, found the new cent while he and and his wife are enjoying the sunshine and warm weather far to the south of their home state.

He wrote, “I received three 2010 Lincoln cents with shield in change on 1-19-2010 in Juana Diaz, Puerto Rico (near Ponce).”

Puerto Rico was an early recipient of the 2009 Lincoln cents also.

Perhaps I will soon hear from collectors in California, Texas, or Florida, which often are the locations of other early sightings.

My thanks go to the snowbird.

I also appreciate his invitation:

“Come on down! Careful of the sun if you haven’t seen much of it since September.”

Ah, sun. What’s that?

Friday, January 22, 2010 2:06:45 PM (GMT Standard Time, UTC+00:00)

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