The "Buzz" Coin Blog with Dave Harper

Finish the set and earn the reward
Posted by Dave

I was working on new price charts for the 2011 edition of North American Coins and Prices.

They were created 20 years ago for the first edition and now with almost 40 years of data reflected by the movement of the graphs, they tell an interesting story.

Coin collecting by no means is the royal road to riches. Average collectors can expect that overall values keep up with inflation or stay just ahead of it.

The coins that make the headlines for record prices do not reflect what average collectors would be buying over time and so cannot be taken as a proxy measurement for the overall success of average collectors. One lesson that might be drawn is the bulk of the value of sets is in the key coins and it is the price appreciation of the key and semi-key coins that keep collectors ahead of the game.

A 1914-D Lincoln cent in F-12 has gone from a retail price of just under $50 to just under $400.

A 1921-S Buffalo nickel in F-12 went from about $30 to $190 in the same time period while a 1923-S half dollar in XF-40 rose from just under $50 to approximately $300.

These are coins that average collectors were buying in 1972. They don’t depend on scarcity of high grades to propel values. Besides, who in 1972 would have been able to buy what turns out to be an MS-66 or MS-67 today before that grading scale was applied to all U.S. coins? Certainly not the average collector.

Some average coins haven’t done well. An MS-60 1921 Morgan dollar has never recovered from its $40 1980-1981 high. It is now just over $25, though that is about double the 1972 price.

Not too many average collectors had a budget for gold in 1972, but those who bought a 1908-D Saint-Gaudens $20 without motto in 1972 paid a bit under $100 for it in uncirculated (MS-60). It shot up to over $1,000 in 1980, but then backed off and only in the last couple of years has exceeded that level, reaching over $1,500. That’s a nice return on investment if you held it all 38 years, but if you stampeded into the market in the gold rush of 1979-1980, the return is far lower.

What does that tell us?

Well, the key issue is to collect full sets, because you cannot know which coins in it will turn out to be the top winners.

Putting a set together without the scarce dates might be all you can afford, but doing so takes much of the financial gain out of it.

So rather than do multiple incomplete sets, zero in on one and do it to the finish. The odds then favor your achieving an ultimate financial reward.

Tuesday, March 23, 2010 1:07:24 PM (GMT Standard Time, UTC+00:00)

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Monday, March 22, 2010

End of coins at credit union or end of coins?
Posted by Dave

It is time to reopen the topic of the future of coins again as I received an e-mail from a reader.

Though he wishes to remain anonymous, he did want to share the information that the El Paso Employees Federal Credit Union will not receive or give out coins as of the end of 2010.

Will this prove to be a one-time event, or will other financial institutions also decide that handling coins is a waste of employee time and money?

Unless provision of coins is done on an industrial scale with major retail customers, many institutions could theoretically follow this example.

Where the line is between economical handling of coins and expensive hassle happens to be, I don’t know. Certainly in small towns like Iola, somebody has to make sure there are coins in the till – at least until retail businesses decide to abandon coins as well.

Great Britain is bubbling with the news that its banks want to abandon checks in 2018. What I have seen includes speculation as to how this will restrict the independence of the elderly, who depend on checks.

It may be simply a matter of technology and habit that will spell the end of coinage, but perhaps American antipathy to high denomination coins actually will hasten the day of demise as everyone realizes the low dollar value of a coinage system that is comprised of cents, nickels, dimes and quarters.

Sure, the halves and dollars exist, but if few individuals use them, they might as well not.

This credit union decision bears watching. It might signal a new trend.

Monday, March 22, 2010 1:14:04 PM (GMT Standard Time, UTC+00:00)

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Friday, March 19, 2010

Dark gold thoughts not dark enough?
Posted by Dave

Back when gold ownership was legalized in the United States on Dec. 31, 1974, there was a lingering fear that the coins that had been illegal to own since 1933 would once again become illegal to own.

Advisors told gold buyers to stick to coins like the standard U.S. gold coins struck before 1933 as well as world coins like British sovereigns and French 20 francs of similar vintage.

This seemed to be an unnecessary precaution as the age of the convenient one-ounce bullion coins was dawning.

The fear that gold would once again be called in by the government in a manner similar to what was done by President Franklin D. Roosevelt in 1933 shows up from time to time in the writings in the blogosphere.

Can it happen again? Sure, the legal underpinnings for a recall still exist.

Will it happen? Probably not.

But if you happen to believe the government is cooking statistics to understate inflation and overstate employment, manipulating the gold market, hiding the fact that it has secretly sold all of the gold in Fort Knox (which is a rumor that has existed all the way back to when Ike was President) – if you believe all of this, why would you believe that the government would let you keep your gold if the worst does indeed happen to the economy?

If the American government would default on its debt after not doing so for 221 years through the Civil War, Depression and World War II, would not political pressure in Washington be so intense as not to allow profits to be taken by those owning gold?

In a dollar collapse, would not the authorities be rooting out gold owners with the same zeal as the IRS presently is chasing tax dodgers with Swiss bank accounts?

Would coin collectors get a pass as they did in 1933 because the Treasury secretary was a coin collector and the President was a stamp collector?

In their darkest thoughts, perhaps gold owners are not thinking darkly enough.

Friday, March 19, 2010 2:02:16 PM (GMT Standard Time, UTC+00:00)

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Thursday, March 18, 2010

Hop away from "bargains"
Posted by Dave

I started my day in the dentist’s chair, so I am a little late getting started in the office this morning.

As is the custom, I was visiting with the dental technician/hygienist who was cleaning my teeth between periods of simply keeping my mouth open as she picked, scratched and polished.

Her daughter has reached the point in her life where she has figured out that the Tooth Fairy doesn’t exist. The story of how she figured it out was interesting as every kid is different.

The technician figured that Santa Claus and the Easter Bunny would soon be toast as well.

That got me thinking about the numismatic equivalent of Santa Claus and the Easter Bunny.

What I came up with was the strong tendency among collectors to equate a low price with a good deal. Buying coins for 50 or 60 percent of the usual retail price has been the goal of some hobbyists.

While it is by no means impossible to score a deal from time to time, the appearance of being able to consistently buy coins for significantly below the prices printed in retail price guides should cause the would-be purchasers to have a flashing red light in his mind.

These coins might just be not what they are represented to be. They might be tampered with or overgraded.

Coin offers significantly below retail should be approached with caution. Have the coins checked out by a grading service, or make sure there is a return privilege in case it becomes necessary to return the coins.

Bargains are nice. They can happen. But when you see nothing but bargains think that it might be a case of the Easter Bunny – a delusion or fable, but without the happy ending.

Thursday, March 18, 2010 2:01:10 PM (GMT Standard Time, UTC+00:00)

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Wednesday, March 17, 2010

Census takes little information
Posted by Dave

As many Americans have, I received the 2010 census form in the mail this week. The constitutional mandate to take a census of the population every 10 years since 1790 has historically been used to offer a snapshot of the American people and their economic situation as well as family profile.

What a disappointment the 2010 census will be to future historians.

Other than the fact that the form confirms that my address exists and who lives there, there is nothing to sink your teeth into.

Future historians will not be able to compare one census to another to determine the advancement or lack thereof of creature comforts, or income level.

While future generations will probably not care if I have graduated to a wide screen TV or not in this decade, it seems like a waste of a good form (that records up to 12 people) not to ask some of the in-depth questions that made prior census results so interesting.

Who doesn’t like to read about the historical advance of indoor plumbing?

Sure, the Department of Commerce doesn’t ever ask the really important questions, like whether there is a coin collector in residence, but other information gathered in the past has its uses.

Now if they could just make the federal income tax form as quick to fill out, then we’d have something.

Wednesday, March 17, 2010 1:02:30 PM (GMT Standard Time, UTC+00:00)

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Tuesday, March 16, 2010

Boy Scout dollar event at ANA convention
Posted by Dave

The Boy Scouts and the U.S. Mint are going to kick off the new Scouting centennial commemorative silver dollar next week in appropriate fashion and, I hope, it will be in front of an audience that appreciates it.

A ceremony has been slated to be held next week in conjunction with the American Numismatic Association’s National Money Show in Fort Worth, Texas.

It will be held at 9:30 a.m. on March 27 with Mint Director Ed Moy joining America’s Chief Scout Executive Robert J. Mazzuca.

Also attending will be a scout who has earned the coin collecting merit badge and it is planned that there will be a short video from Honorary Chairman Bill Sessions.

How long plans for this particular ceremony has been in the works, I cannot say. Since I first heard of it yesterday through scouting sources perhaps the idea is of recent vintage, say occurring after I suggested a Bureau of Engraving and Printing ceremony at the Fort Worth production plant timed to occur during the convention.

If my initial idea planted the thought, great. If not, it is a great idea. With so many collectors assembled in one place, many of whom have scouting backgrounds, it would simply be a shame to waste the opportunity.

Congratulations U.S. Mint and Boy Scouts of America.

I look forward to attending.

Tuesday, March 16, 2010 1:06:15 PM (GMT Standard Time, UTC+00:00)

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Monday, March 15, 2010

What will future collectors think about us?
Posted by Dave

It is a typical Monday morning as seen from my desk at Numismatic News in Iola, Wis.
Gold is up a tad, silver is negative by a cent.

My e-mail contains an inquiry from someone who claims to have a 1967-D Lincoln cent and he even concedes that the coin is in rough shape.

So what do you think I will tell the guy who sent me 17 images of the supposed 1967-D coin?

Another e-mail warns of another potential online scam from China.

Still others are responses to our online poll question as to whether the Proof-68 1909 VDB cent that sold for over $200,000 can be fairly said to have displaced the 1909-S VDB as the key to the Lincoln set.

The funny thing about these e-mails is that if you downloaded them all to a disk, put them into a time capsule and marked it with a message to open in 40 years time, it would probably hit collectors who read them in that far off future date like a 40-year-old letters to the editor page of Numismatic News hits me now.

There are things to identify with, or laugh about as to how we could have thought such things, but generally the overall sense is one of feeling at home.

Both are wonderful snapshots of what’s on the minds of coin collectors. One is the present and the other is the past. There is something compellingly interesting about looking backward, then forward and reflecting about what future collectors might think about us, isn’t there?

Monday, March 15, 2010 1:06:57 PM (GMT Standard Time, UTC+00:00)

Comments [1]

Friday, March 12, 2010

Court decision saves 'In God We Trust'
Posted by Dave

I see in the news that the national “In God We Trust” motto used on coins since 1864 is once again safe for the time being.

Yesterday’s news reports say a three-judge panel of the 9th U.S. Circuit Court of Appeals voted unanimously in its favor.

Since this is America, that isn’t the end of it. The ruling probably will be appealed to the Supreme Court.

What makes the issue interesting for collectors is twofold: there is the numismatic history which includes the motto’s first placement on the U.S. two-cent piece in 1864 and on much of the rest of the coinage in 1866.

President Teddy Roosevelt thought the phrase sacrilegious and took it off new gold coins in 1907. Congress thought differently and ordered it back on in 1908.

Today rather than sacrilege some seek to remove the motto from the coinage because, according to their interpretation, it is a prayer and an endorsement of religion.

Same words. Diametrically opposed interpretations occurring a century apart. Same proposed remedy, but still a minority view. Things change, but then again they don’t really.

What makes the logic of the thing even more peculiar is that a separate ruling by the panel said “under God” is still OK in the Pledge of Allegiance, but one of the three judges that voted in favor of the motto on coinage thought this reference was too much and voted against it, making the ruling 2-1 decision.

The whole question has been a legal issue for basically my entire three-decade career in numismatic journalism and judging from the history of the question, it will continue to be for many years to come.

However, the breathless headlines aside, the outcome will probably stay the same.

Friday, March 12, 2010 2:14:32 PM (GMT Standard Time, UTC+00:00)

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Thursday, March 11, 2010

Try new marketing approach
Posted by Dave

Sales of the Disabled American Veteran commemorative silver dollars have been ongoing since their debut Feb. 25.

The Boy Scouts commemorative dollar goes on sale March 23.

This close sequencing makes me think again about the best way to market commemorative coins.

Dyed-in-the-wool collectors will buy what they will buy no matter the timing. But what proportion of potential buyers meets this description?

Judging by the declining maximum mintages, the obvious answer is there are fewer of them.

In the 1970s Ike dollar mintages of a million tickled collector fancy.

In the 1980s, the 500,000 ceiling for an expensive $5 Statue of Liberty gold coin excited collector interest and that figure became a standard silver dollar mintage in the 1990s as interest in gold coins declined.

We are now at 350,000 maximum mintage for the two silver dollar programs.

Then there is the “Gee Whiz” factor when collectors decide a mintage number is too low. They eagerly buy. These usually involve programs such as the First Spouse gold coins where Congress did not set a specific target, but the Mint marketers did.

If the DAV dollar is not sold out by the time the Boy Scout dollars go on sale, it dramatically reduces the chance of a sellout for the first coin. The fence-sitters will conclude that nothing exciting is going on with the DAV dollar and simply stay on that proverbial fence.

Would it have been better to wait an extra month for the Boy Scouts to go on sale?
I think so, but then the recipients of the surcharge income for the Boy Scouts program would think they are being cheated of an extra 30 days of marketing time.

These dollar coins need to be treated like movie promotions at McDonald’s. Take them one at a time and conclude one before the next one is started. That would likely lead to higher overall sales for the two programs combined than the present method of one program stepping on the other.

Will it happen? Probably not. Congress would have to become more attuned to marketing the programs that it authorizes than is presently the case.

For the politicians maximum sales duration has somehow become the yardstick measuring success.

Thursday, March 11, 2010 2:15:56 PM (GMT Standard Time, UTC+00:00)

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Wednesday, March 10, 2010

Waiting more than 30 seconds
Posted by Dave

I came in this morning to discover our e-mail is not working at the moment. It is amazing how cut off I feel when I can’t see what has come my way since I turned off the desk lights last night after 5 o’clock.

To be sure, there is always some kind of spam message or messages. The senders are clever. No matter how the filters are adjusted, some still arrive at my inbox.

One the other hand, outages of this kind help create a sense of online fraternity because we all have been there, done that over recent years. The question simply becomes one of how long will I stay cut off?

There also seems to be a sort of Murphy’s Law corollary that when e-mail ceases to work, someone will have sent a message and demanded an urgent reply.

Certainly there are several things I was expecting to arrive overnight that I will have to simply wait for.

That is probably not a bad thing. I have written on the subject of patience before (waiting for the banking system to distribute new coinage comes immediately to mind), so I will suck it up and wait and call it a character building exercise.

Wednesday, March 10, 2010 2:08:24 PM (GMT Standard Time, UTC+00:00)

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