Gold bugs love to poke fun at economist British economist John Maynard Keynes. He called gold a barbarous relic. Gold bugs have been replying since the 1920s, that if it is a relic, why is it so important?

Also, the current price of around $900 an ounce and news of Chinese buying seems to indicate a robustness that is anything but a relic.

Fun aside, the bright popular image of Keynes as being out of touch and the leader of a school of thought in economics that let inflationary demons loose in the world can be blinding and obscure the critical times when he was right.

One of those times was in the aftermath of the 1929 stock market crash. Early on he recognized the destructive deflationary wave that was swamping the world economy. He was dismissed at the time as peddling inflationary nostrums that were unsound that no rational person could support.

That sounds awfully similar to the current criticisms of the bank bailouts. What if the proponents of the bank bailouts are right and deflation is the greater danger?

It took more than three years for the Depression to unfold in all its ugliness. We are hardly more than two-thirds of a year into the present post-Lehman Brothers failure problems.

In the spring of 1930 many thought the worst had passed. It is easy to be optimistic in the spring. It is spring 2009.

We seem to still be standing even though we have witnessed housing prices down by 30 percent from the peak, oil down by 66 percent from the peak and, my favorite economic indicator, Mint coin production, which is down by roughly the same percentage as oil.

Those numbers look like deflation. If that is so, how long can the price of gold buck the trend?

Ever see a 5-year-old get a shiny red fire truck for Christmas or some other gift that he wanted badly?

Then you have an idea of the excited tone of voice I heard on the phone when a collector from Memphis gave me a jingle.

He wanted me to know that large numbers of Mint State state quarters were being released by the banks in Memphis. He said they were in original rolls.

The state quarters that he had encountered in this form, he said, were New York, Texas, Maryland and Vermont.

He just wanted me to know about this. I appreciate it. It is amazing what I learn from the spontaneous calls from readers.

Sure the world seems all agog about Twitter messages or regular e-mails and cable news programs seem to be less about news and more about simply begging for viewers to send messages, but much useful information still comes to me in the form of telephone calls and U.S. Postal Service mail deliveries.

I would expect that if collectors undertake a canvas of other banks in other major cities that they might just find either supplies of state quarters backed up in the banking system or quantities cashed in by coin owners now down on their luck because of the severe recession.

However, they got there, now is the time to cherry-pick through the quarters to find the highest grades possible. Remember that original rolls might just contain some coins that can make an MS-70 grade, which in the long term is a better hold than “mere” MS-65 coins, especially for the state quarters that have astronomically high mintages.

The best part is this effort is that it takes time but little money as these coins can be acquired for face value.

Why not jump into this and let me know what you find in your neck of the woods?

Are collectors losing the ability to think independently? Some days I wonder.

I cannot tell you how many e-mails I receive where the writer expounds upon a topic, a specific course of action and then ends by asking me if he should do it. It usually involves buying something to make money.

I am not an investment advisor. I believe in collecting coins methodically over time, building nicely matched sets that please the eye.

Because I am not an investment advisor does not mean that I don’t recognize profits can be made in coins. Long-term collectors who follow the traditional hobby path usually make money unless perhaps the object of their ardor is XF Jefferson nickels.

I am also aware of the touts online. Buy this. Buy that. It will go to the moon. All the while the writer, often anonymous, is busily selling whatever it is online. The only person making a killing is the tout.

That’s not collecting.

If you want to run with the touts, go for it at your own risk. Often what happens afterwards is I get withering e-mails blaming greedy dealers, the U.S. Mint and any other target that comes within range.

Usually after reading this kind of message I think that I have saved a family dog somewhere from being kicked out of frustration.

It is human nature, but it is not collecting.

There is nothing wrong from indulging the urge to make a killing from time to time. My introduction to this was my scramble to buy a 1968-S proof set on the secondary market when it was heading for the moon. The touts of the era were pointing to $50. I paid $15. Issue price was $5. Persons who bought directly from the Mint and got early delivery had a nice tripling of their money at that point.

The set hit $20. I felt ecstatic. But then the bottom fell out. Eventually, the set fell under issue price. I see it is being sold in retail ads for $6.75.

But I received more for my $15 than a proof set. I received a lesson in life that told me to recognize what it was I was doing and to know that even my best guess will not guarantee a profit.

Swine flu is not really a numismatic topic, but with all the media focused on it, it is difficult to resist writing a little bit about it.

For individual collectors, if we feel there is a risk from interacting with other people for the duration of the potential epidemic, what can be more ideal than retreating to our homes and our numismatic interests?

The Internet will allow us to interact with others if we so choose to do so, but perhaps the best use of unexpected home time is the possibility to learn something new, or explore a familiar topic in slightly greater depth.

Without outside distractions, the chance to concentrate and to learn is enhanced. Carve out an hour or two. Turn off your cell phone. Tell any and all family members that this island of time is yours alone and you are going to spend it with your hobby.

Then simply luxuriate in the ability to give the topic of your choice your full attention.

Now your system might be shocked because you have blocked outside stimuli. Then again, you might find that you enjoy focused numismatic time so much that you will try to do it on a regularly scheduled basis instead of catching a few minutes here and there.

Numismatics cannot cure or mitigate swine flu, but it can cure any sense of being trapped where you happen to be. The whole world can be yours without actually physically exposing yourself to it.

I am not in the office Friday morning and will not be in a convenient location to post at the usual time, so I will write a few words ahead of time and hope that you won’t be too disappointed going into the weekend.

Of course, if something truly major happens during the interval between when this is written and posted and when the next one goes up on Monday, well, that is the risk.

Just know that I will be back at my desk on Monday morning.

There. I hope that wasn’t too painful.

This blog marks the completion of two full years’ worth of blogging. The actual anniversary is tomorrow, but, hey, this is Internet time. We have to make it snappy.

So I will celebrate the final day of the second year. Bring out the noise makers.

I think I have learned a lot doing this blog. I have had a lot of fun writing it. I hope you can say the same about reading it.

The wide ranging nature of topics is most interesting. Reader feedback is something that newspapers generate after the passage of weeks. Blog feedback can occur almost as quickly as I can post my comments.

I have found that some topics that I think will generate feedback instead generate the “loudest silence” that I experience. There are other topics that I never would have guessed in a thousand years will spark major attention, but do.

That’s the guiding hand of the audience telling me where we should go. I have a vantage point and readers want to learn what I can see over the horizon. Sometimes I see something worthwhile, but then sometimes I might just as well have stayed home that day.

But good or bad, the topics are part of the flow of discussion that the hobby and all hobbyists are having with each other and with themselves.

It would be interesting to know what future generations will make of these transcripts.

I get a lot of e-mails from frustrated collectors. When it is about a sold out item, I can sympathize with the U.S. Mint, because somebody is always disappointed in a sellout.

Most collectors think it wonderful that something sells out as long as they get one. I know. I have been there, done that myself.

However, in any sellout, there are more potential buyers who could not have their orders accommodated. This is what breeds disappointment.

When everyone can get something for weeks on end, there might be less disappointment but suddenly fewer collectors seem to really want it. Just look at the pattern of sales for the First Spouse gold coins. The first three sold out 40,000 mintages within hours. Sales totals since have declined by as much as 75 percent, but you can still buy them.

E-mails have begun to reach me with complaints of canceled Lincoln commemorative silver dollars orders. It is a popular coin that sold out within six weeks.

Someone had to lose.

The salt in the wound seems to be the electronic messages that show that orders are accepted and then canceled later. Is there anything that can be done about that? That might help.

But then again, disappointment is bitter no matter how it is coated. Hence my sympathy for the Mint. Even with a success, it just can’t win.

There is some talk among the producers of coins from precious metals that a half gram size is needed.

When I first saw this, I had to read it a second time. Half gram? Not half ounce?

There are more than 31 grams in a troy ounce, 31.103 to be precise. A half gram coin would be smaller than 1/60th the size.

The rationale is that a smaller size would be more affordable. To illustrate, if gold were $900 an ounce. A half gram coin would contain roughly $15 in bullion value.
I am rounding. Please, don’t make me use a calculator.

Oh, never mind. I will probably have to get one out to finish making my point.

Is there really a large unmet demand by $15 gold buyer’s? I haven’t noticed.

What I do know is the U.S. gold dollar, which was introduced in 1849 because at the time the United States was swimming in the precious metal bonanza from the California Gold Rush, was never popular because of its small and inconvenient size.

During its lifetime they even made it thinner to increase the diameter to 15mm from 13mm. For comparison, the dime is 17.9mm.

The dollar coin is actually more than three times the size of half a gram. It weighs in at 1.672.

Somehow, I think the world’s coin manufacturers should catch up with the demand for the one-ounce coin first. But then, the premium on the one-ounce coin is far lower than the mark-up would be for half a gram.

After all, what’s an extra $15 or $20 tacked onto a half gram gold coin price. Remember, you are paying for convenience. Yeah, right.

I had a phone call from a Numismatic News reader. She was looking at the weekly Coin Market at a Glance.

“The price of Morgans seeems to be down. Why?”

That’s a pretty broad generalization. I asked her what her point of reference was and I wasn’t trying to be funny. Was it Morgan prices 20 years ago, or from some other year in the past?

No, that wasn’t it.

She was looking at the Coin Market at a Glance from prior weeks.

I stated the obvious. If the prices as printed are lower than those from prior weeks, then indeed prices were lower. If she needed a specific slant on a specific issue, I invited her to e-mail the editor of that section, Harry Miller.

She asked if it had to do with silver?

I asked what date specifically she was looking at.

She replied, the 1921-D. I said it was possible that some of the price fluctuation for that date was due to silver’s moves. It is not a rare coin.

The caller pressed on. Why did the prices fall?

I told her I didn’t know the answer to her question.

She volunteered that she was pricing a friend’s collection and so she was noticing.

It is too bad I couldn’t be more helpful, but one observation I can make is I am getting a large number of calls asking about prices. What this usually means is the family budget is being pinched and some prized coins are going to find their way to eBay or a local coin shop. If enough people are doing this, prices will indeed drop.

One of the tasks I perform on a monthly basis is to make sure that the updates for the Coin Market monthly price guide section in Numismatic News is updated and makes its way through production.

Deadline is this afternoon.

While I was inputting some values for the American Eagle gold, silver and platinum bullion coins, I had the impression that the prices of the silver American Eagles were getting a bit weaker, more so than the swing in the price of bullion would warrant.

Does this mean the Mint is catching up with demand? Could be.

The proof version of the gold American Eagle keeps leaping even as the price of gold itself is lower. The demand is coming from Individual Retirement Account buyers who want to put an authorized gold coin into their accounts.

Now that tax time has just passed, will the proof gold American Eagles retreat a bit?
Again, perhaps.

The other observation I would like to share is the stealth recovery in the price of platinum. It is back over $1,200 a troy ounce after having been significantly below $1,000.

You would think with car sales in the tank that demand for platinum would still be tanking with them, but perhaps it isn’t. Perhaps buyers are looking beyond the present for a recovery.

For a Friday, the thought of an economic recovery is a happy one and something to look forward to – that and meeting the deadline.

If you happen to be near Brockton, Mass., on Saturday and have a little time, you might stop by the main library at 2 p.m.

There is going to be a program presented as part of the upcoming National Coin Week observance

National Coin Week, actually starts, April 19, but , hey, Saturday is Saturday.

Richard Hand, who is organizing the event with the help of three or four friends and two or three library employees, says kids 7 years old and older and adults will be most welcome. The program will last about three hours and some very nice freebies have been rounded up for participants, including a couple of free subscriptions to Numismatic News.

Hand says he has books, a special ANACS slab and other things to give away.

National Coin Week runs April 19-April 25 and other hobby volunteers will be conducting special events and putting on displays all around the country. Check out the activities in your area.

Hand says he will stop by the library every day next week to answer questions and to tend a special exhibit he has put together.

Unfortunately, I am not nearby, so I cannot participate, but if you are, drop by and celebrate National Coin Week with Richard Hand and his volunteers.

The Mint wants to see Americans use dollar coins. I have been helping out in the last couple of weeks. I have been raiding my little stash to more or less get rid of them.

What brought this on was the decision by Krause Publications to change vending machine companies. Those machines in the break rooms here in Iola were virtually my only outlet for dollar coins.

Remove them and you remove the need for me to use them. The new machines were installed at the end of last week. I haven’t yet tried them all, but I was told that one machine did not take dollar coins. Perhaps others don’t, either.

In any event, I spent some of my dollar coins at the Crystal Cafe. I left a few as tips but decided that this is a slow way to get rid of them and the wait staff might mistake them for quarters, especially the Anthony coins that I still have.

So, I paid for a meal with dollar coins last week. The waitress and I got into a good conversation when she asked if I was raiding my coin collection.

I said that I wasn’t.

She told me she has been waitressing for 20 years or so and she has a system of saving the coins she gets as tips. She said she has made many major purchases with the money she saves up in this way from large home appliances to significant home repairs.

So in a roundabout way I was contributing to her next major home improvement. That made me feel better.

Perhaps it is not quite what the Mint has in mind, but it works.

The difficulty in finding the scarce District of Columbia and U.S. Territories quarters have many individuals searching supplies of the denomination in the nation’s banking system and there are interesting observations being made.

Gene Funkhouser of Pensacola, Fla., says that he will no longer accept sealed boxes of plastic wrapped rolls because they are always short $1-$3.

He told me that he first realized something was up about a month ago when he used more quarters as replacements than he thought he should.

He tried five bank companies in his area and even a major retailer and any time the rolls were machine wrapped in plastic the overall total was an undercount. He said occasionally he still finds a roll with an extra coin in it, but that doesn’t affect the overall result.

He wondered why he had never heard of this happening before. I told him I had never heard of this happening, either. The theory of machine wrapping is coins are handled by weight and every roll with an undercount should be offset by a roll with an overcount.

Apprently that is not so in Pensacola. I suppose a statistician could prove that Mr. Funkhouser is just being unlucky for the moment and if he would continue to obtain rolls the quantities would balance out over time, but is that something you would want to bet $1-$3 a box on? He doesn't.

Now it is up to others to see what counts they come up with in their supplies of quarter rolls that are machine wrapped in plastic.

Montana’s two senators want the United States to begin striking bullion coins out of palladium. They introduced legislation in early April calling for a .995 fine one-ounce coin.

No surprise there as Montana has the only working palladium mine in the United States.

The senators' action follows a long line of Western legislative history of supporting mining with metal purchases and turning the metal into coinage.

The Bland-Allison Act of 1878 started the ball rolling, mandating silver purchases and the production of what became the Morgan silver dollar series.

Most Americans probably don’t know what palladium is. I have never seen it even though there have been a few coins made of palladium since Tonga issued the first one in 1967.

Its exotic nature hardly recommends a palladium bullion coin to the investment crowd. When the financial markets became fearful they rushed to embrace what they knew, gold and silver bullion coins. Even platinum, which I assume we are more used to now than we used to be, was abandoned in the bullion coin buying spree of the past year.

The palladium coin proposal is also odd in another way. It wants it to copy the Ultra High Relief Saint-Gaudens gold coin design currently being sold to collectors, right down to the 27mm diameter.

Now making a one-ounce palladium bullion coin just 27mm wide will make it look more like a rubber bathroom sink stopper than a coin.

The question of whether we actually need another bullion coin aside, couldn’t the writers of the bill come up with a more plausible coin? They should have at least had the initiative to raid the Mint’s old coin design cupboard and come up with a Standing Liberty bullion coin or a Mercury bullion coin, or perhaps an 1804 dollar restrike bullion coin.

One of the perennial topics of numismatic writing is the arrival of the April 15 tax filing deadline, a date that usually looms larger for those who owe Uncle Sam money than those who do not.

Those individuals who are entitled to refunds usually get their returns submitted as fast as they can to get their hands on the refund.

My first boss, Arnold Jeffcoat, who occupied the editor’s chair at Numismatic News 1973-1982, had his tax time editorial all ready to go.

He usually wrote that the market would slow down, either as items were sold to raise money to pay taxes or money was not available to make as many purchases.

This pause was often characterized as a buying opportunity if one was interested in the popularly traded and easily salable items like proof sets.

Rarities, of course, don’t trade in quite such a seasonal manner. Their sales cycle runs in longer stretches. When markets are hot, they tend to appear in public sales more frequently as each owner grabs the prestige of adding his name to a pedigree and then decides the easy profit is worth taking in a year or two.

During down parts of the long-term cycles, the rarities appear less and less as the owners, knowing their long-term value, put them away, awaiting the next crazy up cycle that will earn them the profit they are looking for.

Sometimes life events prevent owners from optimizing their sales timing, but it is amazing to watch this speeding up and slowing down process over the years.

Heritage putting an 1804 silver dollar in the Central States auction at the end of this month just a year after selling another 1804 dollar at the prior Central States convention could be an indication that the upside of the market cycle is still intact.

Anyone active in the business will certainly hope so.

Will we see packed highways and crowds of collectors at the May 14 formal introduction of the second 2009 Lincoln cent?

The odds are good because of the online feeding frenzy surrounding the first design of the year. It is hard to believe it can still be going on with a mintage of over half a billion coins, but it is.

Too many people seem to believe that if the new cents cannot appear effortlessly and instantaneously all over the country, they must be rare.

That is a financially dangerous assumption, but as long as the bubble of online enthusiasm lasts, it can go on for a while.

The Rail Splitter design will make its appearance May 14 at the Lincoln Amphitheatre in Lincoln City, Ind.

That’s a ways off the beaten path, so collectors who want to obtain early supplies for face value will have to grab a truck and drive.

How many cents will the Mint have on hand that day? I don’t know, but I hope the staff is planning for more than at the first launch.

There were no shortages on that ceremonial first day Feb. 12 in Kentucky, but some collectors who afterwards jealously watched the prices those early supplies brought online will hope lightning will strike twice.

This phenomenon itself argues against a repeat of the high prices, but perhaps only by degree. Second issues of anything often see much higher initial demand. However, this increased demand is from buyers whose only goal is to dump them as fast as they can for as much as they can get.

Only when the market later gets a sufficient sense of how much greater this early demand contributed to existing supplies does the correction set in.

Markets generally are not kind to the prices of second issues, but another feeding frenzy will likely occur before that happens.

It was bound to happen. I received my first complaint from a reader who received a package from the Mint by UPS and complained that he had to sign for it and arrange to be home to do it.

To be fair, what was in the package was the book that is supposed to accompany the Ultra High Relief Saint-Gaudens $20 gold piece that the Mint is selling this year.

The Mint had starting shipping coins without the books so that collectors didn’t have to wait for their coins while the Mint worked out the problems in acquiring the books themselves.

The collector I heard from apparently received his coin before the new policy took effect because he contrasted not signing for the valuable coin but having to sign for the much less valuable book.

This event follows a change in policy on signatures. Prior to March 13, signatures for the very valuable coins were not required. After that date, they were.

This policy change occurred after collector complaints were heard about these gold coins being left on doorsteps without the recipients having to sign for them. So the Mint showed it was responsive to its customer base.

What’s the Mint to do now?

In this case, the wise course is to treat it as an anomaly and ignore the complaint.