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 Wednesday, July 28, 2010
Mint's stealth anti-counterfeiting campaign
Posted by Dave
Efforts to get the Presidential dollar coin to circulate widely in the United States might be failing, but there is a silver lining.
It was reported yesterday that the British equivalent of our $1 coin, the one pound coin, is widely faked and that 2.81 percent of all one-pound coins in circulation in the United Kingdom are counterfeit.
Though the percentage might seem low at first glance, it is apparently the threshold at which merchants burned by bad coinage will refuse to use it. That would force the Royal Mint to come up with a completely new alternative.
In the United States, we have not had a problem with fake $1 coins in circulation, but the Mint, nevertheless, keeps churning out alternative coins.
The Ike dollar arrived in 1971, the Anthony in 1978, the Anthony revival in 1999, the Sacagawea dollar in 2000, the Presidential dollars starting in 2007 and the Native American coins starting in 2009.
Americans have a choice of five different coin designs to ignore each and every year now.
We all know anybody trying to spend these coins looks guilty of doing something wrong to the nondollar coin using population. If you have tried to spend some as I have from time to time, you know what I mean.
That’s darn clever of the U.S. Mint. It has successfully defended the U.S. economy from an influx of fake dollar coins and saved its valiant retail merchants from unfortunate losses.
I’ll bet you didn’t know that. I sure didn’t.
Wednesday, July 28, 2010 2:11:20 PM (GMT Daylight Time, UTC+01:00) 
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Tuesday, July 27, 2010
Why are proof Buffalo sales down?
Posted by Dave
Proof Buffalo one-ounce gold coin sales are not doing well if we use last year’s offering as the yardstick against which to measure this year’s results.
So far collectors have snapped up 23,643 examples of the proof 2010 issue. Sales have been ongoing for about two months now.
At the same point for the 2009 coin, the number was almost twice as many at 42,075.
So what accounts for the large decline in response? Are collectors bored with the coin and so it is following the path we all know so well as demonstrated by the First Spouse coins? You know, large first year sales with progressive drops each year (or design) afterwards?
If that’s not it, could it be collectors are running out of money to spend on items like the proof Buffalo? Times are still not normal. Money is tight generally, though there are hopeful signs around the economy.
A third possibility is collectors might feel they can buy it cheaper later. That almost is tantamount to believing that the price of gold will drop.
And the fourth possibility in our exercise today is that it is simply summer. Since the proof Buffaloes became available June 3 seasonal collectors might not even be aware that it is available. What will happen when these collectors get going again in September? We’ll have to wait and see on that one.
There it is: many possibilities for lower proof Buffalo sales but no real answer.
Tuesday, July 27, 2010 2:08:52 PM (GMT Daylight Time, UTC+01:00)
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Monday, July 26, 2010
Back where we started?
Posted by Dave
It’s that time of year when the corporate calendar begins to ask employees to focus on what might happen in 2011.
While at the height of summer, next year seems quite distant, but then again, come Labor Day, we will kick off the autumn collecting season and that pretty well flows right into next year.
Perhaps numismatics should be on a fiscal year ending Sept. 30 as the U.S. Mint is.
One thing about 2011 that occurred to me was it will mark the 25th anniversary of the founding of the Professional Coin Grading Service. That event certainly revolutionized the hobby.
At the time, it was a better mouse trap. It was not the first third-party grading service. Then the big dog in that field was the American Numismatic Association and its Certification Service.
ANA did not use slabs, but it did photograph coins and provide grading certificates.
PCGS entered the field and introduced the concept of encapsulation. The idea appealed to collectors and the next wave in third-party grading was born.
The ANA got out of the business in 1990.
The irony perhaps is that ANA got into the field because of the threat of international counterfeits flooding the market. That was successfully combatted at the time and when the focus became grading it seemed less competitive.
Now as in the early 1970s, counterfeits are once again front and center among collectors and that aspect of the service a grading service provides needs to be stressed.
Monday, July 26, 2010 2:12:43 PM (GMT Daylight Time, UTC+01:00)
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Friday, July 23, 2010
Gimmick or wave of the future?
Posted by Dave
Last week’s Numismatic News online poll results are worth pondering.
The question asked whether U.S. Mint engravers should be given the freedom to develop commemorative designs using color, holograms and other advanced features appearing on many world collector issues?
A majority said no, but the margin was rather thin at 56 percent no and 42 percent yes.
If 42 percent of collectors would be willing to collect these nontraditional numismatic issues, that could be quite a market.
This question should be explored further. Are the respondents on the “no” side all on the older side of the demographic divide and the “yes” side younger, or are the views held equally by all ages of collectors?
That is the key question in my mind.
If younger collectors are in favor and they already constitute 42 percent in favor of the new alloys, colors and holograms, that would clearly be where the U.S. hobby will go.
Certainly major world mints that I respect have jumped into the field.
One of the most interesting to me is the Austrian Mint because it combines traditional skillful die engraving with new alloys.
I gave a Coin of the Year Most Innovative Coin Award earlier this year to Austria for its 25-euro Fascination Light silver-niobium coin.
I commented at the presentation that I couldn’t believe the lightbulb could be made so interesting. The coin has an old gas lamplighter on one side and the new-fangled lightbulbs on the other.
Take a look and see what you think.
You will immediately note that I am sending you to a ShopNumismaster page.
Look at it, think about and it and then comment here if you would like. I am sure you will have an opinion.
http://www.shopnumismaster.com/product/2008-fascination-light-silver-proof-coin/27DH
Friday, July 23, 2010 2:12:47 PM (GMT Daylight Time, UTC+01:00)
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Thursday, July 22, 2010
Should blanks be made in USA?
Posted by Dave
Blanks for the American Eagle program made in Australia for the U.S. Mint was a topic raised by Domestic Monetary Policy and Technology Subcommittee Chairman Melvin Watt and Rep. Ron Paul Tuesday at the subcommittee's hearing.
Watt asked U.S. Mint Director Ed Moy if it was efficient to send American gold to Australia to make blanks.
Moy’s reply was that “this is the easiest way to get blanks to our specifications.”
Rep. Paul wondered why the Mint can’t make its own planchets. He asked what a businessman would do.
Moy explained that it was a matter of capital investment. He noted that an average year’s output was eight million ounces of production. Last year was 28 million and this year it will be 32 million. These totals are for silver blanks as silver American Eagles also entered the discussion.
Even private blank fabricators are leery of adding production capacity in the present market. Moy said they want guaranteed future purchases if they would agree to undertake the investment to expand.
As general background Moy said the Mint got out of the planchet making business a decade ago.
Rep. Frank Lucas of Oklahoma said there are manufacturers in the United States who would like to get into the business and he also noted what he called the cavernous Mint building in Philadelphia and wondered if it wouldn’t be more effective for the Mint to produce blanks.
He suggested a study of the question.
Moy said this issue would be explored.
It seems to me that Moy has sound financial reasoning on his side, but that isn't the whole of the issue.
If it is believed that current American Eagle production is unusually high, installing productive capacity to meet current demand would prove costly should much of it then become idle as output reverts to a level closer to the 8 million ounce average.
However, at a time of high unemployment, the idea of adding some jobs to the Mint has great appeal. Why do federal make-work programs when a genuine need can be addressed? However, making the silver blanks could reduce private domestic employment.
What to do? This is an issue worth watching.
Thursday, July 22, 2010 1:57:58 PM (GMT Daylight Time, UTC+01:00)
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Wednesday, July 21, 2010
Proof silver American Eagles might fly again in 2010
Posted by Dave
Will there be proof gold and silver American Eagles this year after last year’s gap in production?
There could be.
Mint Director Ed Moy told the House of Representatives Financial Services Committee’s Subcommittee on Domestic Monetary Policy and Technology yesterday that he supported legislation to allow the Mint to divert silver coin blanks from bullion coin production to proof coin production.
If he gets the green light by Sept. 1, he says the Mint can produce about 200,000 proof coins a month, or total of 830,000 coins by the end of the calendar year.
Will it happen?
There was no opposition expressed. That’s a good sign.
A better sign is that proof gold American Eagles were not mentioned. That likely means they are a lock for 2010. I have noted from time to time that the Mint has kept up with sales of the bullion gold American Eagle coins.
However, Congress still has a great deal on its plate and members want to go home as soon as possible for summer recess to campaign for re-election in the November election.
Good news this is.
We will see if Congress acts and it becomes great news.
Wednesday, July 21, 2010 2:07:48 PM (GMT Daylight Time, UTC+01:00)
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Tuesday, July 20, 2010
Low mintages as far as eye can see
Posted by Dave
Just about every collector knows that mintages ran very high during the state quarter program. It was popular with collectors and it was noticed by the general population.
But just how high is high?
I decided to do a little bit of calculation this morning to come to a conclusion to that question.
During the 10 years (1989-1998) that preceded the state quarter program, the U.S. Mint produced 14.8 billion quarters. Now presuming that this 10-year stretch was a representative time and production matched just what the economy demanded, we can compare this number to the next 10-year period in which the state quarter program was conducted (1999-2008).
Any guesses as to the number of state quarters struck?
It was 34.8 billion.
Subtract the 14.8 billion total from the prior 10-year period and you get 20 billion extra quarters.
That’s a lot of extra quarters.
Was it all due to collector demand?
I doubt it.
Face value of all of those coins is $5 billion. That’s a bit much for the hard core hobbyists to save.
Where did they all go? Sooner or later most of them will return to circulation. Casual collectors and even some harder core hobbyists will give up and spend them. We’ve seen how this phenomenon works during the present recession.
Excess bags and rolls have been coming back to the economy whether because the owners have given up on hopes of profits, or whether personal hard times forced them to dump the coins for face value.
Beautiful examples of state quarters keep showing up in change, like the MS-68 2006 Nebraska quarter I received in change yesterday.
The fact that all of these quarters are coming back into use will depress the Mint’s current quarter output by quite a bit.
If normal demand is the decade prior to the state quarter program, it would take the economy 13.6 years to absorb the supply if the Mint didn’t make one additional coin.
However, stopping quarter mintages is not possible because we are in the first year of the America the Beautiful quarter program. Those designs must be produced.
The question is how many.
The first two designs total 128 million coins. If that rate of production continues, there will be 320 million quarters struck this year.
That depressed level of output could continue for up to 17 years, or more than the life of the America the Beautiful program, which concludes in 2021 with the 56th design.
Can quarter production stay that depressed for that long?
According to these numbers, it sure could – unless the government decides to pay off its debts with new quarters.
Tuesday, July 20, 2010 2:38:02 PM (GMT Daylight Time, UTC+01:00)
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Monday, July 19, 2010
Mintages look interesting
Posted by Dave
There is an interesting mintage phenomenon developing this year.
Presidential dollars are being produced in greater numbers than America the Beautiful quarters.
When the Hot Springs National Park quarter production figure was revealed to be 59.6 million coins (divided 29 million to Denver and 30.6 million to Philadelphia), I thought perhaps the late introduction and more limited production time might be responsible for the low figure.
However, the Yellowstone National Park quarter has come in at a not much higher level of 68.4 million (divided 34.8 million Denver and 33.6 million Philadelphia).
Both numbers were handily beaten by the first two Presidential dollars struck this year.
Millard Fillmore came in at 74.48 million (divided 36.96 million Denver and 37.52 Philadelphia) and Franklin Pierce came in at 76.58 million (divided 38.36 million Denver and 38.22 Philadelphia).
To be sure, the Presidential dollar totals have declined dramatically from the 340.36 million Washington mintage level of 2007, but 2010 output seems to have found a plateau. That the plateau is higher than where America the Beautiful quarters are sitting is worth noting.
The quarter still is heavily used in commerce and presumably more collectors go for the quarter than the dollar coin, but then again perhaps not.
Have we hit the point where the denomination for the coin struck for circulation whether one cent or $1 no longer matters much to collectors?
Or is this still simply a phenomenon where the excess supply of state quarters continues to depress current quarter mintages?
I can make a case either way. Where the choice of collecting cents or silver dollars mattered a great deal to me in the 1960s when my funds were limited, nowadays inflation has reduced the relative importance of coin face values and age has upped my income.
Do the face value of current coins matter to you when deciding what to collect?
Monday, July 19, 2010 2:24:35 PM (GMT Daylight Time, UTC+01:00)
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Friday, July 16, 2010
Time for a radio appearance
Posted by Dave
It’s that time again. One of the seasonal events in my numismatic year is being a guest on Harry L. Rinker’s Whatcha Got? radio program on Sunday morning.
This year as in many past years, the subject of conversation is the coin market as it has been recorded in the new 2011 edition of U.S. Coin Digest.
He has an audience of wide interests that includes coins. He is also a man of wide professional capabilities, describing himself on his website as doing “appraisal, consulting, editorial, educational, media, personal appearance, research, and writing services in the antiques and collectibles field.”
This year, as in the last several, I imagine one of the topics will be gold coins. With the continuing uptrend in bullion, everybody seems to have an interest in the precious metal.
There will also be time to mention new collectible issues like the America the Beautiful quarter series that began this year and runs until 2021.
I am scheduled to talk with Harry at 7:30 Central Time on Sunday morning. The program streams online at http://www.gcnlive.com.
If you want to find out more about Harry, visit http://www.harryrinker.com.
If you are interested in a copy of the 2011 Coin Digest, visit http://www.shopnumismaster.com/product/2011-us-coin-digest/us-coins.
Friday, July 16, 2010 2:14:37 PM (GMT Daylight Time, UTC+01:00)
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Thursday, July 15, 2010
Fractional gold has purpose, or does it?
Posted by Dave
Since sales of fractional gold American Eagle bullion coins began in June, the tenth-ounce coins have moved out the door at a reasonable pace.
As of July 13, buyers had taken 300,000 of the small coins. They are popular as jewelry and they also are popularly used by promoters to entice novice gold buyer’s to get genuine U.S. Mint gold at a price that doesn’t choke a horse.
One-tenth of the present $1,200 price of an ounce of gold is much easier for novice buyers to part with than the cost of the one-ounce coin.
Obviously, though ,with sales approaching 700,000 pieces, demand for the one-ounce coin is not hurting. Savvy investors need no introduction to it.
Sales of the half-ounce coin at 31,000 pieces and the quarter ounce at 44,000 coins are betwixt and between. They aren’t the standard investment coin and they are not nearly as popular as jewelry. So what exactly are they?
In days when $2.50, $5 and $10 coins were needed to make change for gold $20s, the smaller sizes had a purpose.
With investment coins, you don’t need to make change, though I have seen the concept bruited about online as the fractional gold coins are tipped as needed when the currency system breaks down and change in gold will again be required.
Judging from current fractional gold American Eagle sales, perhaps that point is a rather hard one to make.
Thursday, July 15, 2010 2:13:25 PM (GMT Daylight Time, UTC+01:00)
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