The "Buzz" Coin Blog with Dave Harper

Arm wrestling opinions and computers
Posted by Dave

Will the coin hobby follow the rest of American life and sink into endless 50-50 opinion splits?

I don’t know, but it seems like more and more aspects of life end up with an inability to reach a consensus. I hope that never happens among collectors.

My first real experience of trying to do something with half for and half against was in the Lake Iola Lake District. In the 1990s there were a number of closely divided votes at the annual meeting on chemical treatment to control weeds. In a close vote, it was decided not to treat. The following year in a close vote the policy was reversed and it was decided to treat. In the third year in another close vote the policy was reversed again.

You get the idea. How do you represent the will of the people when that will changes so often?

That was the challenge. We got through it.

This morning I wanted to get this blog posted. My computer was saying no. Fortunately, I think I have prevailed finally.

I am sure you can identify other aspects of life from elections to neighborhood events.

The hobby of coin collecting for me has always been an oasis because on most issues views are fairly similar.

Collecting? We’re for it.

Details? Well, there can be a variety of opinions, but so far not divisively so.

I hope that never changes.

Wednesday, September 30, 2009 2:33:03 PM (GMT Daylight Time, UTC+01:00)

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Tuesday, September 29, 2009

Don't you just love the billing statements?
Posted by Dave

I received my monthly credit card statement in the mail yesterday. In these tough economic times, I am sure others are doing what I do in scrutinizing each bill carefully for personal budgetary reasons but also for the possibility of fraud.

While I do not expect to see any fraudulent entries, you never know. Just among the members of the numismatic group that sit in my little office area, there are interesting stories to tell.

One staffer this month had been notified that strange charges were appearing on one account and steps were taken to cancel it and get a new one to a spouse who happened to be on the road at the time.

I was looking at my bill to make sure a final charge was on it from the Los Angeles American Numismatic Association convention that I had incurred Aug. 8.

Imagine that. Nobody is in a hurry to pay bills ahead of time when enjoying a free float, and I certainly got the advantage of more than six weeks of it, and since the bill is not yet due, I will have some days more.

However, in this case, I would rather get it taken care of because I have to file an expense report with corporate headquarters. That office wants staff to get expense reports in five days after the return to the office. I imagine this is pretty routine in corporate America.

I met that goal for the most part, but this bill was still hanging over my head because I did not know the precise amount.

Another colleague here in the office had a charge on a card that the corporate office had already reimbursed for, but the amount had not yet appeared on this personal account.

All well and good, but with recent changes in the laws governing credit card issuance, the firm involved changed its rules, too.

In this case, the change was the fact that the interest clock started when the charge was incurred. This amount now becomes another request to corporate headquarters for reimbursement.

All of this I know is fairly routine in any American’s life nowadays, but sometimes I yearn for the simpler times when what I could spend was the cash in my wallet and when that ran out I had to stop.

Tuesday, September 29, 2009 2:12:06 PM (GMT Daylight Time, UTC+01:00)

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Monday, September 28, 2009

Will Chronicles set sell out?
Posted by Dave

The final 50,000 proof 2009 Abraham Lincoln commemorative silver dollars will finally hit the market Oct. 15 when the Lincoln Coin and Chronicles Set is placed on sale by the U.S. Mint.

Price of the set is $55.95 and there will be a five-set-per-household limit imposed. (Reduced to one, 9/29)

It has been roughly six months since the proof and uncirculated versions of the Lincoln commemorative silver dollar sold out rapidly. There were 325,000 proofs sold and 125,000 uncirculateds taken by collectors in just six weeks to bring total sales to 450,000 coins.

In contrast, sales of Louis Braille silver dollars are just over 165,000 after being on sale since March.

Overall, there is a limit of 500,000 on the Lincoln commemorative silver dollars, so the Chronicles set will have a maximum run of 50,000.

Potential buyers will be doing the math to see if a sellout of this final tranche of Lincoln dollars is likely and making mental projections as to possible profits from selling them on the secondary market.

If every buyer takes the maximum, it will take only 10,000 buyers to grab the entire issue. (Changed to 50,000, 9/29)

After potential buyers are done with all of their calculations, will they notice how good the set looks? I hope so. It is well done, but I know that art takes second place to calculations of scarcity.

In this Year of Lincoln, do you think this set will sell out?

Monday, September 28, 2009 2:06:06 PM (GMT Daylight Time, UTC+01:00)

Comments [4]

Friday, September 25, 2009

For mint sets, some things change, some things don't
Posted by Dave

When the U.S. Mint’s uncirculated coin set, popularly called the mint set, is released Oct. 1, some collectors will probably have the same reaction I did when they see the price.

$27.95.

That’s a lot of money.

The very first set I ever purchased from the Mint was the 1969 set, which was priced at $2.50.

Naturally, I can’t just let it go at that. There is always another way to look at things and the mint set is no different.

The set I purchased for $2.50 in 1969 had nine coins in it with a face value of $1.33. The face value works out to 53.2 percent of the sale price.

The 2009 mint set has many more bells and whistles in it in the form of commemorative designs. There are 36 coins in it with a face value of $14.38. That works out to 51.4 percent of face value.

That’s remarkably consistent pricing for sets 40 years apart.

This year’s hobby has been excited by the four Lincoln cent designs. Counting the coins from both mints, Denver and Philadelphia, that is eight pieces. And their alloy is that used in 1909, 95 percent copper, 3 percent zinc and 2 percent tin.

There are two nickels, two dimes and two half dollars.

The quarters add up to 12 pieces and the dollars to 10, four Presidential designs and one Native American dollar from each of the mints.

It makes the 1969 set shrimpy in comparison. But in 1969 we were just glad to have mintmarks back having just returned to the coinage in 1968.

There was an “S” cent and an “S” nickel. It seemed exciting to have that mintmark back, too, since San Francisco supposedly had closed coin production forever in 1955 only to be reopened to cope with the coin shortage of the mid 1960s.

The set also did not have a Philadelphia nickel in it, something that still confounds newcomers. That mint simply didn’t make nickels that year or in 1968 or in 1970.

The one half dollar in the 1969 set was from Denver. It had a 40-percent silver alloy. Collectors considered themselves fortunate to have any silver in the set at all, but were still disappointed at the loss of 90 percent silver coinage due to the Coinage Act of 1965.

Conflicted feelings? Sure. But still true.

Somewhere, sometime, somebody is going to have conflicted feelings about this year’s set and fondly remember buying it as I remember buying the 1969 set.

Friday, September 25, 2009 2:21:31 PM (GMT Daylight Time, UTC+01:00)

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Thursday, September 24, 2009

Take a 'Polk' at First Spouse series
Posted by Dave

The Citizens Coinage Advisory Committee and the Commission of Fine Arts have reviewed designs for next year’s America the Beautiful quarter series and the First Spouse gold coin series.

There are five different quarter designs to be issued in 2010 and four First Spouse designs.

What strikes me about the designs is not their quality or lack thereof. I will let you take a look at the story that gets posted a little later and the designs that go with it so you can make your judgments.

What hits me is simply a matter of timing. Next year we finally reach Mary Todd Lincoln, wife of the President historians often rank as the greatest.

The arrival of a famous name following a sequence of lesser known Presidents’ wives should help the series sell. Some rank the Presidents of the 1850s prior to Lincoln as the worst and almost the worst holders of the office. It is no wonder Americans know little or nothing about them. Average people know hardly more about the Presidents of the 1840s.

Put another way, if the series is to have any chance at all of reviving from the current low level of sales, it will be up to Lincoln to start the process of heavy lifting.

The wife of Ulysses S. Grant, Julia, will probably give a boost to sales in 2011.

Once we get to the 20th century, sales could also jump for the wives of Teddy Rooevelt, Franklin Roosevelt, Harry Truman and Dwight Eisenhower.

There are no guarantees, but familiarity is something present issues are lacking.

Sarah Polk, anyone?

Thursday, September 24, 2009 2:03:26 PM (GMT Daylight Time, UTC+01:00)

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Wednesday, September 23, 2009

Gimme an 'ant-swer'
Posted by Dave

Questions from readers are an important part of the weekly Numismatic News. These are so important in fact that the Coin Clinic question and answer column is one of the most popular features in it. This has been true for many years.

Questions that make me scratch my head do come up from time to time.

When I opened my e-mail this morning, this is what I found:

“I just received my U.S. Mint order of two 2-roll sets of the Lincoln pennies ‘Professional Life.’ Upon opening one of the white sealed boxes, a dozen black ants came crawling out. I have never had this happen to me before and was wondering if others have had this happen. Have you ever heard of this?”

Well, I have certainly never heard of this. That doesn’t necessarily mean it has never happened before.

Perhaps readers of bygone days did not think such an occurrence was worth bringing to the attention of other readers. I can’t say.

Another recent letter raised an issue I have never seen brought to the attention of hobby readers before either. The writer complained about the smoking laws in Illinois that allowed people waiting in line to buy the Professional Life cents for face value in Springfield to smoke.

Neither of these issues should have any impact on the quality of the coins received or affect their current and future value.

Is there any other deeper meaning about the long-term vitality of the hobby? I imagine I will puzzle that over for awhile.

Wednesday, September 23, 2009 2:05:44 PM (GMT Daylight Time, UTC+01:00)

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Tuesday, September 22, 2009

Consensus points to higher gold
Posted by Dave

I do not yet know how our weekly poll question results about whether gold has peaked out at $1,000. However, those individuals who took the time to send me e-mails with their views are almost unanimous that gold has further to go on the upside.

That is perhaps not surprising given the fact that it has been ascending since 2001 from the middle $250s an ounce. Those who bought then have made a lot of money in eight years.

Had we had the technology to conduct a similar poll in the weeks immediately before the high in 1980, the results would probably have been the same.

Similarity to 1980 does not mean that the present views are in error, but it is sure important to note the fact that nearly everyone who responded at some length holds the same view.

Even this week’s issue of Barron’s, which usually covers Wall Street, was bullish on gold.

Someone who didn’t share the consensus view forecast a gold decline later this year rooted in another dip lower for the economy generally.

Will this overwhelmingly positive majority prove to be right?

There are many people who seem to be both financially and emotionally invested in the answer to that question.

Tuesday, September 22, 2009 2:04:09 PM (GMT Daylight Time, UTC+01:00)

Comments [2]

Monday, September 21, 2009

Rest in peace, Rollie Finner
Posted by Dave

Rollie Finner died Friday at the age of 75. He was the husband of Patti Finner, current president of Central States Numismatic Society and former vice president of the American Numismatic Association.

A visitation/wake occurred yesterday afternoon at their home in Iola. It was Rollie’s wish to do it that way. He had a long battle with cancer and he hoped his family and friends would feel better in familiar surroundings.

The coffin was placed in the living room not far from the chair I last saw him sitting in in August.

Rollie came to Iola in 1969 in the way many of us have. Chet Krause hired him. He was working at the time at Carleton College in Northfield, Minn.

Chet liked Rollie’s photography and wanted to see his photos in Numismatic News. Photo pages were the result.

Rollie had a 28-year stint in the National Guard and his photos in service were award winners.

As might be expected, in addition to family, friends and neighbors came to pay their respects. Current and former employees of Krause Publications were among them.
Chet Krause himself also came as did Larry Shepherd, executive director of the American Numismatic Association, and Carol Shuman, ANA controller.

Rollie moved on from Krause Publications in August of 1970, but he remained part of the Iola community and an avid numismatist. His papers and his interest stayed with him until almost to the end.

I think Rollie would be pleased if he knew who came for the wake and the nature of the conversations. Sadness is unavoidable, but I think he was right, it was a much better gathering at his home.

The funeral and interment is at 11 a.m. today at Our Savior’s Lutheran Church Cemetery in Iola.

Monday, September 21, 2009 2:09:55 PM (GMT Daylight Time, UTC+01:00)

Comments [1]

Friday, September 18, 2009

Buy as many UHR gold coins as you want
Posted by Dave

Order limits come off on Monday for the 2009 Ultra High Relief Saint-Gaudens $20 gold piece.

For the first time since the coins went on sale in January, any buyer can buy as many from the U.S. Mint as he can pay for.

The limit had been set at one when the program started to assure the widest possible distribution among collector buyers. It rose to 10 in July and to 25 in August.

So at 9 a.m. Eastern Time Sept. 21, it is a whole new ball game.

What does this signify?

The Mint must now feel that it has enough supply on hand to meet all likely demand. But how much might that be? I don’t know. I heard talk by private collectors at ANA putting the final demand around 125,000. But how much credence should be put in talk?

This order limit change could also signify the program is winding down and this is the way of cleaning out the pipeline. The Mint does this at the end of commemorative programs. That would confirm ANA chatter.

This possibility seems less likely than the first because it is only September and the maximum mintage limit for the entire program was set at 300,000. Buyers haven’t even hit the 100,000 mark yet.

However, if the program is winding down, what would that signify?

Perhaps ending the program early would be the mechanism to free up gold bullion to be made into blanks for the proof American Eagle program. That’s another program that is leaving collectors in an expectant mood.

Gold has given the hobby an exciting time in recent months, but the downside is that there are more questions than answers.

Anybody who is interested in getting an example of the UHR gold coin should probably think about purchasing it now. Why take a chance in being disappointed if you really do want one?

If you happen to want 10,000, you can probably have them, too.

Friday, September 18, 2009 2:17:57 PM (GMT Daylight Time, UTC+01:00)

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Thursday, September 17, 2009

Personal hobby interaction still matters
Posted by Dave

I had an conversation with Jon Lerner for tomorrow’s Coin Chat Radio program. He is the bourse chairman of Coinfest, which will be held Oct. 9-11 in Stamford, Conn.

What I found most interesting about our conversation was at the point I was asking him just how important it is to have face-to-face interaction of collectors and dealers in this age of the Internet.

For committed collectors, this personal knowledge is still critical in many ways, perhaps not if you are looking solely to buy the proof sets issued since 1950, but to find out if there is a fit of personality and attitudes for the long-term building of collections.

In the history of numismatics dealers and collectors have built amazing collections together, but it doesn’t get done if one or the other’s traits rubs the other party raw. You might be able to get through a single transaction in difficult conditions, but the dealer for sure is not going to take a want list and start acting on it without feeling very comfortable with the other party.

What do I mean?

Lerner illustrated his comments at one point with an anecdote of a recent show. He had a junk box on his bourse table. Someone searched through it and pulled out a silver half dollar marked $5.

At the time, the silver in it was worth about $6. Lerner said he was going to let the potential buyer have the coin for the marked price until he said, “Will you take $3?”

Lerner said no and took the coin back without further negotiation.

Something as simple as this short personal interaction is enough to make or break any kind of profitable potential long-term commercial relationship.

So even in the age of the Internet, personal compatibility still matters.

Thursday, September 17, 2009 2:01:11 PM (GMT Daylight Time, UTC+01:00)

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Wednesday, September 16, 2009

More 1933 gold $20s to hit market?
Posted by Dave

Imagine if 10 more 1933 $20 gold pieces are about to become available to the collector coin market, what would they bring?

The only legal one sold for $7.59 million plus a $20 government monetization fee.

This exciting possibility becomes at least a little more probable because a U.S. District Court judge has given the government until the end of September to either prove that the 10 coins were stolen in court or give them back to the family of Israel Switt, a Philadelphia jeweler who died in 1990, according to a story in the New York Times.

What will the government do?

It is hard to imagine that the government will just fold after spending more than 60 years trying to enforce its view that ownership of 1933 double eagles is illegal.

Certainly many, if not most, collectors are rooting for the family to give the government a good poke in the eye. It seems like a classic case of David vs. Goliath.

Even if the government does give up this particular legal approach, it will have the fall-back position of dunning the family for overdue inheritance taxes on coins that are probably worth tens of millions of dollars combined.

With the IRS calculating penalties and interest, the family will probably owe another 10 1933 gold $20s.

Wednesday, September 16, 2009 2:05:35 PM (GMT Daylight Time, UTC+01:00)

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Tuesday, September 15, 2009

Brass or bronze? Got me again
Posted by Dave

I see on the U.S. Mint’s list of products that are coming soon that the annual uncirculated coin set now has an Oct. 1 sales date. This contains an uncirculated example of every denomination and design struck at both the Denver and Philadelphia mints.

Sales of the uncirculated coin set were postponed when the Mint had a problem with toning on the new copper-alloy cents, or I should write the old copper alloy cents.

The law authorizing the four designs for the 2009 Lincoln cents also requires that they be minted for collector sets in the alloy that was used in 1909, which was 95 percent copper, three percent zinc and two percent tin.

It is perhaps not surprising that a problem of this kind would have occurred. The Mint is out of practice with such an alloy. Collectors know how prone to toning and spotting cents are. That is why they are usually the first coins looked at in sets to see how well preserved the overall uncirculated or proof set is.

In this blog I did not call the alloy bronze as I did in August. Alan Herbert, the Answerman, e-mailed me about that.

He wrote, “95 percent copper and both tin and zinc can go either way. If the majority is tin, then it’s bronze, but if the zinc makes up more than 2.5 percent, then it’s brass.”

By that definition, the cents will be brass. This is a good example of why Alan is the Answerman who writes the weekly Coin Clinic question and answer column in Numismatic News.

So, will you be a buyer of the uncirculated coin set containing brass cents?

Tuesday, September 15, 2009 2:02:34 PM (GMT Daylight Time, UTC+01:00)

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Monday, September 14, 2009

Wow, I got a Guam
Posted by Dave

I might have said something like that when I was 10 years old, but the kid collector in me still bursts forth now and then. It did so again on Saturday.

I received a Philadelphia Guam quarter in my change at a Wal-Mart in Appleton.

This part of the country is the tail end of the coin distribution network. When something reaches me, it usually means it is pretty well distributed across the country.

Whether this is true this time is questionable, but it is interesting to be able to report that even with the reduced mintages totaling just 87,600,000, a Guam quarter has made it to me in Wisconsin. The Philly mintage total is 45,000,000. That is just 1/20th the Philadelphia total for the Virginia state quarter struck in 2000, a year of record Mint production.

Let’s assume for a moment that my obtaining the coin does indeed mean supplies are pretty well spread across the country. What would that indicate?

This design is just one behind the current one, which is the American Samoa quarter that was released at the end of August.

If distribution is occurring, even at lower quantity levels, the reports of the economy bottoming out might just prove to be true.

For many years I have taken a reading on the economy in January by how soon I get a cent and other denominations with a new year on it. When the economy is really humming, cents are usually out in the major metropolitan areas within a day or two of New Year’s and they make it to me by the second or third week of the month.

Of course, this year was different. Very different. We had the worst financial crisis in the United States since the Great Depression. This depressed the usual commercial demand for coins and banks trying to survive weren’t ordering.

Time goes on. Conditions change. Perhaps the Professional Life Lincoln cent will be showing up in my change real soon.

Monday, September 14, 2009 2:17:04 PM (GMT Daylight Time, UTC+01:00)

Comments [2]

Friday, September 11, 2009

Go off the beaten path
Posted by Dave

I was editing a story yesterday about Seated Liberty half dollars. This is a series that many collectors tend to overlook. It is the hole in the historical doughnut.

Early federal coinage is avidly collected. Seated Liberty halves came after this period, starting n 1839. The series that followed the 1891 termination of the Seated half series, the Barber, Walking Liberty, Franklin and Kennedy half dollars are series that most collectors have some personal experience with.

But looking at the prices in the Coin Market price guide and you have to conclude that many collectors are missing an opportunity to put together a set in the circulated grades that would be both a challenge yet doable when the cost is spread out over a period of five or 10 years.

I am suggesting the circulated grades because the Mint State pieces can be terribly pricey, unless a collector needs just the pieces for a type set.

Why don’t more collectors jump into sets like this? Well, its partly our own fault.
Advice to collectors that used to be, “Buy the best you can afford,” has turned into “don’t buy anything less than Mint State.”

This perhaps was not done by conscious design, but we have gotten there anyway.
Novices with money come in and demand top grade pieces even when no such coins exist.

What to do? Well, Numismatic News published a piece by professional grader F. Michael Fazzari pointing out that About Uncirculated coins of a generation or so ago are now Mint State.

There is no profit to be made by telling would-be clients that what they want does not exist. So grading gets bent.

This has also occurred in the circulated grades for coins like the Buffalo nickel. The demand outruns supply and corners get cut over time.

So why not jump into an area where this trend matters less? Seated Liberty halves are scarce enough that if VF today becomes XF tomorrow, the coins will still be scarce and they still will have value.

Friday, September 11, 2009 2:10:25 PM (GMT Daylight Time, UTC+01:00)

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Thursday, September 10, 2009

New U.S. bullion coins; who cares?
Posted by Dave

When next year’s quarter program honoring national parks and other sites in 50 states and six other territorial jurisdictions of the United States begins, a parallel issue will also kick in. It is a series of coins you won’t be able to acquire at the local bank.

As each new quarter is released, the program also authorizes the striking of another version of the design on .999 fine silver blanks with diameters double the size of the old Morgan silver dollar.

The even troy weight of the new issue will be five ounces. At the present $16.28 price, the bullion value alone will be $81.40.

When issued by the U.S. Mint, even as a bullion coin there will be a mark-up. That will bring the cost up, but to what? $90, $100, $110?

I think the whole thing makes a joke of American coinage, but then the solons in Congress thought otherwise and tucked the provision into the quarter bill.

Will bullion investors flock to it?

Why would they do so? The American Eagle is so much more widely traded and recognizable.

There is a value to being familiar. Five new five-ounce coins a year runs roughshod over the concept.

It seems to me that the design changes are intended to try to make collectors think they need to buy them.

How many will be willing to spend $500 a year or more on such an item that can only be described as little better than a novelty?

It also pays to remember that silver could rise in price between now and the conclusion of the program in 2021.

On the other hand, if high cost daunts enough collectors, the next generation of hobbyists might have a very low mintage series to look at when the program concludes more than 11 years from now.

Thursday, September 10, 2009 2:17:59 PM (GMT Daylight Time, UTC+01:00)

Comments [4]

Wednesday, September 09, 2009

Chomping at the bit
Posted by Dave

This has been a year where many in the hobby have wanted something or expected something to happen only to have to wait far longer to see it fulfilled.

In the Internet Age, patience is no longer a virtue or even acceptable. Rapid fulfillment is the expectation and anything less grates.

So, we have been waiting for gold to touch the inevitable $1,000, but have been teased relentlessly but not seen much fulfillment. We haven’t had a close above $1,000 since February and yesterday disappointed yet again.

Then there are coin deliveries from the Mint. When the Ultra High Relief $20 went on sale in January, stated delivery times ballooned and then contracted. Some buyers were livid.

Many hobbyists waited for the release of the new Lincoln cent designs only to find that the banking system was broken and the usual pipeline from Mint to customer was going into reverse as people and businesses desperate for cash took fewer coins or even sent coins back to the Federal Reserve System. Only in the last few days have collectors in some parts of the country reported all three 2009 designs in their change.

The run on bullion American Eagle coins has kept the Mint to the production of just the one-ounce gold and silver version. The proof collector versions have been long awaited and are still expected in the fourth quarter.

I could cite other examples, but the pattern of 2009 has been clear. Waiting has been the name of the game. It does no good to report that collectors in the past waited far longer and the old hobby self-help efforts that used to kick in nowadays are viewed as either terrible impositions or part of some sinister plot to enrich dealers at the expense of the little guy.

Will collector patience ever return?

I guess we’ll have to wait for that too.

Wednesday, September 09, 2009 2:04:02 PM (GMT Daylight Time, UTC+01:00)

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Tuesday, September 08, 2009

Of gold and unbacked notes of the past
Posted by Dave

Look at gold. It has broken through $1,000 a troy ounce for the third time. This will bear watching going forward, but having just finished a holiday weekend, my mind has been looking backward rather than forward.

A family gathering took me to St. Paul, Minn. It was a great time to catch up.
I took a look at Prosperity Heights grade school that I started kindergarten at 49 years ago this month. It looks remarkably unchanged except for what appears to be a gymnasium addition.

I have many memories from the place that I left in the middle of second grade. I remember the whole school watching the liftoff of John Glenn, who then became the first American to orbit the earth in 1962. A number of televisions had been placed at various spots in the halls.

Hobby wise, I date my coin collecting days as starting after I left the Twin Cities, though I do have one numismatic item from that time.

My father thought $2 bills were a curiosity that I should be aware of. He gave me one. I thought it was so neat that I have kept it all these years, though once or twice I used it in my young years as collateral for a loan from my father in anticipation of future allowance income.

My father was an accountant who wanted me to be aware of how the world of finance worked.

The note is a Series 1953 Red Seal, which is another name for a United States Note. This series was a legacy of the Civil War when the Union was forced to issue paper money that had no backing of gold or silver.

The U.S. Note issuance came to be frozen at $346 million and was not finally abolished until the 1990s. By that time, it was irrelevant to the economy and its issuance was a fiction. $100 U.S. Notes were moved around from an unissued vault at Treasury to a vault that had the designation as “Issued.”

But in my childhood, you could find $2 and $5 U.S. Notes in change if you watched closely. I obtained a $5 years later when I was a paperboy.

It is perhaps appropriate to discuss unbacked paper money from former times as a counterpoint to the present unbacked notes and gold’s price reaching four digits.

Tuesday, September 08, 2009 2:01:41 PM (GMT Daylight Time, UTC+01:00)

Comments [1]

Friday, September 04, 2009

Will you win the Mint lottery?
Posted by Dave

Though specific release date and price are not yet known, the pending sale of the Lincoln Coin and Chronicles set in the middle of October looks like a certain sellout.

The set is limited to just 50,000 because that is the number of proof Lincoln
commemorative silver dollars that were set aside for inclusion. The commemorative dollar sold out rapidly early this year.

A proof set comprised of just the four Lincoln cents sold more than 66,000 in the first five days of sales. That seems to indicate a huge and ready reservoir of collector demand for the Lincoln Coin and Chronicles proof set.

The key difference will be price.

The four-cent proof set is just $7.95. The set with the silver commemorative will be priced somewhere in the neighborhood of $50.

Will the much higher price deter many buyers?

Ordinarily it might, but offsetting that is the likelihood that many buyers will view the set as a sure winner on the secondary market. The proof dollar is currently trading on the secondary wholesale market over $50.

Of course, the Mint could slow things down a bit by putting a shockingly high price on the set. I would expect this not to be the case, though.

A sellout will bring excitement to the hobby. It will also bring complaints. Some collectors, even those who know the situation ahead of time, will gripe about not being able to buy a set if there is a crush of demand that outnumbers the 50,000 maximum sales number.

It makes me wonder why there aren’t more complaints from the public every time someone buys a lottery ticket that fails to win.

Friday, September 04, 2009 2:02:15 PM (GMT Daylight Time, UTC+01:00)

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Thursday, September 03, 2009

When hot market premium disappears
Posted by Dave

Gold coin prices only go up, right?

This is a good day for a timely reminder that they can and do go down.

I had an exchange of e-mails from a longtime reader of Numismatic News yesterday.

He wrote: “What is happening w/the price of gold at the coin shows? It shows that the price is up but the dealers don’t want to pay those prices. I took a $1,200 loss on a double eagle I recently sold at the Florence show here in Oregon over the price I was offered last year at this time when gold was down.

I responded: “Supplies of gold coins were so tight last year because of investor demand that premiums on common date collector gold coins were bid up. You did not tell me the date, but I surmise by the price action that it must be a common date.”

The reader was philosophical about it, which shows a long-term outlook on things.

He wrote back to me: “The double eagle was a 1909-S, MS-63 grade. It was graded by a local dealer whom everyone knows and trusts. Last September I turned down an offer of $1,850 for it as I wanted $2,000. Before this last show I noticed that the price had skyrocketed to $2,200 for that coin and I was certain I would get the $2,000 this time, but to no avail. I guess the adage ‘you snooze, you lose’ is more than true in this case.”

It is important to remember that premiums on gold coins are not fixed. They rise and fall with the market. When buyers can’t get enough of the coins, they rise. When the numbers of sellers increases, premiums fall.

The 1909-S Saint-Gaudens $20 is one of the most common dates out there. Its price except at the ultra high grade end always returns to a smidge above melt value.

Fortunately for the writer, one coin is a lesson. I would hate to think of the outcome had this involved multiple coins representing his retirement funds.

Thursday, September 03, 2009 1:59:19 PM (GMT Daylight Time, UTC+01:00)

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Wednesday, September 02, 2009

Last hurrah or new dawn?
Posted by Dave

In the first eight months of 2009, the Mint has struck 18,764,500 silver American Eagle coins. That doesn’t seem like a large number to a generation of collectors who came to hobby maturity in the period after the Coinage Act of 1965, when mintages in tens of billions became the norm.

It is instructive from time to time to get perspective. I was looking through the mintage figures for the Morgan dollars. There are only seven pieces by date and mintmark that have higher individual mintages.

Of those, only the 44,690,000 1921 Philadelphia Morgan total seems unlikely to be surpassed by the time the final 2009 American Eagles are struck and sold to eager bullion investors.

That is interesting. The Mint’s current output is in the same league as the Morgan dollar from its heyday. Output demand is also for the same reason: Americans are uncertain as to what properly should be considered money and what shouldn’t be.

Prior to 1900 when the United States formally adopted the gold standard, silver was considered a monetary metal, albeit an inferior one to gold.

Farmers and other debtors liked its relative plentifulness and looked to the silver dollar and its paper money cousin, the Silver Certificate, to help ease the burdens of their debts.

The New York monied interests looked in horror on silver because at the time it signified expansion of the currency – another name for inflation.

They wanted their repayment of principal and interest in good, solid, uninflated gold.

The monied interests basically got their way, but not before a huge outpouring of Morgan dollars built up the supply of dollar coins. It was no accident that production basically stopped after 1904. Silver had been demoted officially and demand for silver dollars declined with its change in status.

The large mintages of 1921 did not signify any return of status to the silver dollar but an effort to replace rapidly 270 million that were melted in 1918. But even then, it took until 1928 to meet that total.

The American Eagle, like the Morgan dollar, is a product of a generation that is trying to figure out what it wants from money.

Will American Eagles be considered the last hurrah for coinage of precious metals, or the first step taken in 1986 to return to a precious metal based currency?

Wednesday, September 02, 2009 2:56:56 PM (GMT Daylight Time, UTC+01:00)

Comments [1]

Tuesday, September 01, 2009

Sit up straight or you aren't good as gold
Posted by Dave

Yesterday, the U.S. Mint raised the ceiling on the number of Ultra High Relief Saint-Gaudens $20 gold pieces that can be purchased per household from 10 to 25.

The limit had only just been raised from one coin to 10 on July 27. This first action after six months of sales where the limit was just one coin occurred after the Mint had given every collector who wanted one the chance to buy one.

This policy assured the widest possible distribution and certainly collectors did not complain of lack of fairness in distribution.

But collectors being collectors hit upon something else to complain about: the lack of a requirement to sign for the orders that were shipped January through early March. The Mint changed delivery policy in March.

No coins were ever reported by my readers as being stolen as the result of the earlier delivery method, so the complaints to the Mint probably grated a little.

Mint staff probably felt like a teenager being told by an elderly aunt to not talk with their mouth full and to sit up straight at the table. The advice is good and correct, but not conducive to family bonding.

Tuesday, September 01, 2009 2:05:01 PM (GMT Daylight Time, UTC+01:00)

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