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Viewpoint: Hold on to ‘circs’ for better return in future

By John V. Kamin

Thank you for writing your recent blog of May 23 and publishing it in the June 14 Numismatic News, comparing the increases of value in $1 of circulated silver coins (you got) 51 years ago, from 1965 to 2016.

Find out why Morgan dollars have a good track record in growing demand and value.

Find out why Morgan dollars have a good track record in growing demand and value.

Then, you compared them to a savings bond and concluded that (before taxes on the interest) both $1 of silver coins circulated and $1 of the savings bond yielded about the same, approximately 11 times their initial $1 of value.

But going a step further, what you did not mention were two things. Number 1, the dollars you got back after 51 years had lost over 90 percent of their buying power. Your original $1 bets wouldn’t buy you much in 2016, though both rose.

I find it interesting that this was not mentioned. Reason? 1965, I ordered a brand new Mustang convertible from the factory in Michigan, V8, power equipped, etc., cost $2,900 delivered.

Recently, 50 years later, I rented a new Mustang V8, usual accessories, and the window sticker showed $33,000 delivered.

So, the dollars you put away in 1965 were not the same as 2016 dollars with minimal reduced buying power, that a person got back, in your 2016 comparison.

I won’t even mention again the income taxes one would have to pay on the interest collected on the savings bond, nor the capital gains tax on the circulated silver coins if sold.

The poor retiree who started a first job in 1965, maybe a few years later, and now has long since retired, and has to replace his car might have to pay not $2,900 as I did, but $33,000 or more.

I made a mistake. I should have kept that Mustang after I wore it out. The Mustang rag tops bring big money from that 1965 era at 2016 collector auctions.

One other thing I noted in comparing your article, you did not mention putting away $1 in BU coins.

Instead, you could have put away two Franklin 50 cents BU, or maybe even one Morgan $1 common date, at that time. Both items were selling at coin shows in 1965 at $1.25. You could cherry-pick a nice choice BU Morgan $1, or maybe two BU Franklins for about the same price, just 25 percent more than face value.

The BU Morgan $1 would be worth $50 BU today, and the two BU Franklin 50 cents  (any dates) about $20 at least, maybe more. Lesson I learned? Saving “circs” on common coins is not nearly as rewarding as putting aside BU coins.

I’m sure that if you had wandered into the nearest coin show as a kid, Dave Bowers or Chet Krause or Shotgun Slade or Redman would have been glad to furnish you with the $1 Morgan, or the two Franklin 50 cents, for just 25 cents or 50 cents extra and probably let you cherry-pick!

Bottom line? Saving common date “circs” is not nearly as rewarding as saving choice uncirculated silver commons, or even slightly better dates. It took me a while to learn that lesson and a lot of statistical analysis.

John V. Kamin of Tarzana, Calif., is the consulting economist/editor of “The Forecaster” financial letter.

Viewpoint is a forum for the expression of opinion on a variety of numismatic subjects.
To have your opinion considered for Viewpoint, write to David C. Harper, Editor, Numismatic News, 700 E. State St., Iola, WI 54990. Send email to david.harper@fwcommunity.com.

This article was originally printed in Numismatic News.
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