Buzz with Dave Harper

Knocked off sale

2008-05-16T17:08:42.5850000-04:00

They just went on sale May 5, but already the frisky price of platinum has forced the Mint to suspend sales of the four-coin 2008 platinum proof Eagle set. The set contains 1.85 troy ounces of the precious metal. At today's closing price for platinum of $2,132 an ounce, the four-coin set contains $3,944.20 in precious metal.

Individual proof platinum coins are still available from the Mint.

Gold narrowly missed the $900 mark and closed the week's trading at $899. Silver closed at $16.904.

Does this mean the downward correction in precious metals prices is over?

Show comes to me

2008-05-16T09:02:23.0200000-04:00

Tables are turned for me today. Usually I have to leave Iola, Wis., to attend a coin show. This time, the show is coming to me.

Numismatists of Wisconsin gather just a few yards from the Krause building here for their annual convention.

There are 55 dealer tables, so it is a fairly cozy show, which gives me the opportunity to have some nice conversations with show attendees.

I will not be rushing off to cover a board meeting or perform some other must-do task. I simply can be a part of the show and watch the public come in at 1 o’clock this afternoon.

In addition to not traveling, show hours at 1 p.m. to 6 p.m. today and 9 a.m. to 6 p.m. tomorrow recognize the habits of the area. We will not see an empty bourse floor Sunday morning while many people are in church. There simply will be no Sunday hours.

This pattern is not something that I am making up, either, nor is it something unique to coin shows. We have an annual Old Car Show in Iola that attracts 140,000 people over the course of four days. This year the dates are July 10-13.

I have been a volunteer worker at the car shows for the Lions Club and before that the Jaycees since 1978.

In recent years, the migration away from Sunday hours is very clear. It is so clear that no admission fee is charged on Sunday to encourage a few extra people to visit and to prevent any sense that those who do visit are not getting their money’s worth.

The heart of the car show is now Thursday through Saturday, which is very much like a coin show.

If you can make it, come to Iola for the coin show and the car show. Admission to the coin show is free.

Opportunity knocks at auction

2008-05-15T09:01:47.8740000-04:00

Are there any rare coins left in collections?

Seems like a silly question, but I was paging through auction catalogs for the sales that will be held in the last week of May both before and during the Long Beach show.

Wow. It is amazing what is going on the block.

Collectors at certain levels of achievement find that it is very difficult to carrry on to a logical conclusion because certain rarities come into the market only infrequently. That can stymie many a hobbyist with large sums at his disposal. This is their time. Act now. It is a limited opportunity.

The present market environment seems to be at that rare point in time when generational shifts, profit-takers and routine business factors all seem to be working in favor of bringing coins to market.

The generational shift means none of us is getting younger and sooner or later prudent financial planning means selling off beloved coins. That certainly seems to be the case with the April sale of the David Queller Collection. It was apparent how emotionally bound up he was in his coins. He is not alone. We all feel it, but we all aren’t going to have an auction catalog with our name on it.

Profit-takers who bought coins a few years ago, even six months, ago might decide now is the time to take money off the table in view of the uncertainties in the economy and in the rest of the world.

For regular dealers it has been conventional wisdom since the present market got truly hot that the absolute best way to get the highest possible price for quality coins and bank notes is to consign them to a public auction.

How long this happy confluence of factors will remain is anyone’s guess, but boy oh boy do I enjoy seeing what is coming up for sale.

Treasures make the news

2008-05-14T09:05:21.6090000-04:00

Treasures seem to be making a lot of news these days. It is not just one but three that have come to my attention in the last several days.

The dispute between the Spanish government and Odyssey Marine Exploration goes on over what is claimed to be $500 million in Spanish silver coins taken from what Spain says is the wreck of a naval vessal, the Nuestra Senora de las Mercedes, sunk in the Atlantic Ocean in 1804.

Hobbyists may be cheering for one side or the other, but the fact is that sooner or later the coins will enter the market.

The legal dispute could stretch on for years in the Florida court handling the matter, though if the coins are indeed from a warship, then Spain would seem to have a very strong case under admiralty law.

A recovery team that planned ahead and got legal title to a wreck in the Gulf of Mexico 60 miles off the Louisiana coast has yielded U.S. gold coins struck at the Southern mints and a nearly complete set of Capped Bust half dollars.

This treasure is smaller. It is valued at $1 million, but U.S. collectors who collect Dahlonega, Charlotte and New Orleans gold will be interested to see the census of the coins recovered even if they don’t want to buy them when they become available.

The wreck is of a sidewheel steamer called the SS New York that sank in 1846.

And a subcontractor of the Mel Fisher Center in Florida claims to have found some jewelry from the treasure fleet of 1715 that sank in a hurricane. Not numismatic, but interesting and it puts a name back in the spotlight that has been coming in and out of numismatics for decades, though Mel himself is no longer living.

Stay tuned. Treasure always seems to attract buyers who are willing to pay too much.

Variety is the spice of collecting

2008-05-13T09:03:01.5930000-04:00

Tuesdays are generally busy days for me but the second Tuesday of the month tends to be the worst.

"Paper Money Market" price guide goes to press this afternoon. The "Coin Market" price guide and Numismatic News have their ad deadlines this afternoon. Today is also the final full day of work before World Coin News goes to press tomorrow and Bank Note Reporter has its ad deadline.

It keeps me jumping from topic to topic and task to task as everything gets finalized. It is all very engrossing work, but the necessity of interrupting one task to complete another as the multiple deadlines near keeps me hopping.

And naturally, events don’t stop happening. There is the need to check things out. I see gold is down $11 this morning and the Mint puts more Presidential dollar coin products on the market.

Numismatics is a fascinating field. To look at it from the perspective of a collector of U.S. coins or a collector of U.S. paper money or world notes or world coins, there is no better day for me to see the variety than today.

It reinforces my perception that the hobby is a lifetime undertaking. No matter what area you pick, it will be a good one. It will challenge you to learn and improve yourself.

All the while it also serves as a vehicle for blowing off steam and forgetting routine cares.

And there is nobody scolding you, except me perhaps, that you haven’t taken your coin time today.

Don’t forget. It is good for you.

Adams again

2008-05-12T09:09:28.3900000-04:00

I have not purchased any First Spouse gold coins. The sixth one, which honors Louisa Adams, comes up for sale May 29 and I won’t buy that one either.

I decided at the beginning that putting together a set of half-ounce gold coins was going to require more money than I was willing to put into it.

However, that does not mean the series has not been beneficial to me – or could be.

I bought a book on my last vacation. It is called “Ladies of Liberty” and it is written by Cokie Roberts, a television reporter and personality.

It is a book that I doubt I would ever have picked up were it not for the existence of the First Spouse series. Vacations being vacations, I did not get very far into the book.

The book is not solely about First Ladies, but they feature prominently among the gallery of personalities that helped establish the norms and practices of the early days of our republic.

My start got me through Abigail Adams. I will finish it, but I am not quite certain when.

History is important and Robert’s chosen topic helps the reader to remember that the Founding Fathers were not sitting out on a mountainside somewhere gazing down on us mere mortals, but were husbands and fathers doing their best for their families and their country with a lot of help from their wives.

Perhaps it was fate that would have me stuck at Abigail Adams. I wrote a column last year in Numismatic News taking a poke at her husband, John Adams. I received a letter of rebuke from Brad Karoleff who urged me to read the David McCullough biography. I did so.

That topic came up again at the Numismatic News table during the Central States convention last month in Chicago when another reader wanted to dispute my take on John Adams.

Even though he disagreed with me, I take it as a compliment that almost a year after I wrote something, he was still treating it as a current event.

Such is the power of our history. Such is the power of a coin series that makes us think about our history.

Steel yourself for new cent

2008-05-09T09:09:43.3120000-04:00

It looks like a steel cent has moved closer to reality and a steel nickel is a definite maybe after the House of Representatives passed H.R. 5512 yesterday.

Passage came after it was caught up in two days of political infighting on Capitol Hill. The bill calls for a copper-colored steel cent. The new composition would come into use 270 days after the Senate passes an identical bill and the President signs it.

The House wording provides an escape clause if the Treasury can find an alternative composition in 90 days to achieve the same goals of lowering production costs to less than one cent for each cent produced.

That isn’t likely.

Steel nickels may be in our future, too. There is mandate language but the time frame is longer and the Treasury is asked to jump through a number of hoops that could easily prevent any action.

The mandate language is two years after enactment of the legislation into law a nickel-coated “primarily” steel 5-cent coin will be produced, but the there is also a very big sticking point. The House mandates a new composition that can “co-circulate with the existing supply of 5-cent coins and work interchangeably in coin handling machines.”

Good luck with that.

Steel is magnetic and copper-nickel is not. The use of magnets is a common form of vending discriminator mechanism. Steel is also significantly lighter.

The legislation also provides a list of exceptions to allow the Treasury to wiggle out of the mandate language, but these include consultation with the vending machine industry and other coin users, and other hurdles that make reaching any kind of consensus and conclusion difficult if not impossible.

Mint Director Ed Moy is not buying the steel mandate even for the cent. He issued a statement yesterday looking for better legislation to come out of the Senate.

New tax problem heads our way

2008-05-08T08:58:49.0000000-04:00

Are we about to see the end of Internet commerce as we know it?

Sure the question sounds apocalyptic – it could be.

New York State will begin taxing transactions on the Web at the end of the month. This is in the form of requiring online merchants to collect sales taxes from sales to New York buyers.

How long will it be before other states, starved for tax revenue because of the recession and the real estate bust, implement a similar policy because they view online sales as the only ripe melon left to squeeze?

The Industry Council for Tangible Assets, which has led the fight against state sales taxes on numismatic and bullion coin sales, should once again be commended for the work it has already done and perhaps plan to gear up for yet more undertakings.

Take Wisconsin, my home state, for example. There are no reliable statistics as to how many coins Wisconsin collectors purchase online. The sales tax applies to their purchases.

Currently, the onus is on the individuals themselves to self report on their annual state income tax return in the form of the parallel use tax, which is basically the name given to the sales tax when it is paid by the buyer rather than the retailer doing the selling.

Compliance is not high. What happens when the Internet retailers get a letter telling them to collect the 5.5 percent (state and county) sales tax on future transactions involving Wisconsinites?

There have been silly alarms online for years about taxing e-mails, but this is a very real problem that could be coming at us.

Time to prepare.

No new cents yet

2008-05-07T08:59:40.5910000-04:00

Copper-coated steel cents may be in our future, but not yet. A legislative tussle between the Congress and the administration branch of government continues.

The House of Representatives failed to pass a bill overnight that would have authorized the new composition. It could pass later, or it could be permanently stalled.

The underlying issue is who has the authority to change coinage compositions. The Constitution says Congress does. The Treasury says the Congress can delegate it to the Treasury secretary.

So rather than have a simple piece of legislation calling for copper-coated steel cents that all parties seem to have agreed on or at least acquiesced in, the legislation pushes powers buttons that arrays all party political forces into confrontation.

The result so far for those of us who simply are on the outside looking in is abolutely nothing.

All operators are busy now

2008-05-06T08:53:43.2470000-04:00

I had a phone call yesterday afternoon from someone who was definitely not a happy camper.

I receive calls and e-mails of this kind from time to time. It is part of the job. We are not perfect here in Iola. We try our best, but we do make mistakes.

Sometimes things we do aren’t mistakes, but some people simply don’t like it. I hear it all.

That’s life. That’s fair. That’s part of what I am here for.

Yesterday’s call was a little different from the usual because the individual talked and talked and I finally had to ask him why he was calling me because he never got to what I could perceive as the reason for the call. This didn’t make him happier at all. I could hear it in his voice.

I apologized for what he experienced even though precisely what he had experienced I was not sure of. What was clear was he had said he had talked or contacted in some fashion a number of people but could not identify them, at least until I pressed him and he mentioned Answerman Alan Herbert, who has been a well-known figure in Numismatic News for 40 years with Coin Clinic and Odd Corner.

So I helpfully jumped in and said to him to give me a call directly next time and that might prevent future problems.

“Who are you?” he asked.

Ouch.

What's right for you?

2008-05-05T08:58:09.1060000-04:00

When precious metals come off highs as they have in recent days, the logical question in the minds of gold and silver owners is when is the right time to sell?

Should I have sold gold when it hit $1,000? Should I have sold some silver when it passed $20? Every owner is probably asking himself or herself those very questions.

I thought of this at lunch yesterday. I was transiting through the Miami airport. I met a couple from a small town outside of Tulsa, Okla.

We were thrown together in a crowded restaurant. We got to talking. Neither was a collector, but they owned some coins that they had acquired or saved years ago.

The husband said he had about 30 silver dollars. He wondered what the price was. I replied that they were currently probably worth about $15. Then he told me a story about 1980. He had had them then. When the local coin dealer was offering $30 apiece, he decided he would sell them when they reached $35. He said he checked every day. They inched a bit higher, but never made $35. Then the plunge started and no sale occurred at all.

Here we are 28 years later. Bullion is making headlines but silver dollars are still not as high as 1980. He can always keep them, but the one thing that has changed is that he has worked for 40 years and is nearing retirement. He is older. Does he have the time to wait?

That is the question.

Gold may be eternal, but its owners are not. The time to sell is dictated as much by personal circumstance as it is by the long-term outlook. It pays not to forget that.

What are you looking for?

2008-05-02T09:01:39.8830000-04:00

I began my blog more than a year ago. It is amazing how much it becomes a part of my life and how quickly, too.

Five days a week, holidays excepted, I have something posted. The topics are varied. There never seems to be a shortage of subjects. That is all to the good.

However, from time to time it is a good thing to ask the opinions of readers. I do this fairly frequently, but one thing occurs to me.

It comes not in relationship to frequency, but I do not recall that I have ever asked a completely open ended, “What topic would you like to see covered in my blog?”

My memory is not perfect, but it is good enough to give me a high enough level of confidence that I am writing this entry and asking this question now.

Here we are on the verge of a springtime weekend. My thoughts are turning toward the outdoors and to activities that have absolutely nothing to do with my desk, chair and computer in the Numismatic News office.

You can be sure when I return to the office on Monday morning that I will be all ready to go once again.

But what should I be all ready to go with? Let me know your suggestions. I will see what I can do from that point.

Am I just filling space today? You can bet on it. That doesn’t mean my request for suggestions is illegitimate. It simply means that I am already indulging in nonhobby thoughts.

It is your job to get me refocused. Make a suggestion.

Got the radio habit yet?

2008-05-01T09:03:43.1030000-04:00

Have you gotten into the habit of listening to Coin Chat Radio online at www.coinchatradio.com? I hope so. The next new program is 11 a.m. this morning.

Don’t worry if you think you’ve missed it. It repeats at the top of every hour. The programs from prior weeks are archived so that you can hear what occurred in the past since we began in March.

As you might guess, there are interviews that I am particularly proud of and would point out to you given the opportunity and there are others that are of a more routine nature or that lapse into the past so quickly that it is no longer relevant to bring them up again.

But that is the fun of this online radio. We get living, breathing collectors and dealers and we let them have their say in their own words.

You can catch the tone of voice. You can hear the turn of phrase. You can tell if it is spontaneous.

I like spontaneous best. I enjoy walking around the bourse floor and talking to people. It is fun. It is interesting. And, yes, I know, I use and say the word “interesting” a lot.

But if it were not interesting, why would I be doing it?

Remember Coin Chat Radio.

One more thing with the cent

2008-04-30T08:51:58.2907500-04:00

If you will permit me to mention the cent twice in one week, I have another observation to make about it.

I get mail and e-mails that repeatedly stress the point that if the cent is abolished and rounding is instituted, the rounding will always work against the consumer. Some statistical types have written in to say not so and then tried to prove the point, but most writers still feel in their gut that they are at a disadvantage without the cent.

How does experience enter into the question? Well, I know that merchants want to make as much money as possible, but does that mean rounding would always go against the consumer?

Look at the “Take-A-Penny” dishes. They are common around here. I assume they are common in other parts of the country. Merchants are using them in my experience to add the last penny or two to round off my purchase price. I assume it is the merchants themselves who are doing the stocking of these dishes.

I base that assumption on the fact of the surprised looks clerks give me when I from time to time throw a cent or two into the dish instead of putting it into my pocket.

For you see, if I am owed a penny, the merchant pays it to me. If I owe the penny, it comes out of the dish. It is always in my favor.

Would merchants behave so differently with rounding? They certainly want to make people feel good about buying things from them. Leaving customers muttering under their breath about unfair rounding would not contribute to that positive shopping experience.

There. I have had my say. What do you think?

What a popular topic

2008-04-29T09:04:18.4310000-04:00

Any time I write about cents, the level of interest seems to rise. I don’t believe I am particularly clever, but it is a topic that resonates in America at the moment.

I asked last week if the American people were quietly abolishing the cent by not using it and pointed to plunging mintage figures to illustrate the point.

Comments were posted. I appreciate comments. This time it truly is different for the cent.

In the past, the mintage totals would rise to peaks the coincided with economic high points and then fall. What makes this cycle different is that in prior cycles each high point was basically higher than the prior one. This time the high point was hardly more than half the prior one.

Something is going on. It is worth paying attention to. Sometimes people really do change their habits.

It happened before with the half dollar. The half dollar turned from a useful everyday coin into a commemorative to be saved and reverenced in 1964 when the Kennedy half was introduced.

Rising silver prices and changing alloys did not help, but Americans got out of the habit of using the coin. Now it languishes almost in the same land of the undead as the Sacagawea dollar that I wrote about yesterday.

Are Americans changing their coin using habits again to the exclusion of the cent? Could be.

As one person e-mailed me, all denominations below the quarter should be abolished and even the Internal Revenue Service rounds everything to the nearest dollar.

Zombies walk the earth

2008-04-28T09:03:48.8845000-04:00

When I was a kid I loved the old horror movies. Frankenstein, Dracula, the wolfman and other ghouls were great fun.

One type of monster was the zombie. The zombie is a person neither alive nor dead but undead and still walking the earth, much to the concern of the local population of fearful villagers.

We have zombie coins. Coins that are not either alive and useful in commerce or dead like the half-cent, two-cent and three-cent coins.

They are animated for the express purpose of being sold to collectors. They once had real life, but now do not.

Today the Zombie 2008 Sacagawea dollar walks the earth. She won’t terrify the villagers, but coin collectors are being asked by the U.S. Mint to buy bag and roll quantities of them and to buy proof sets and mint sets in which she is included. She was last a living denomination in 2000 and 2001, but then became a zombie.

The dollar coin is problematic, anyway, but the dollar coin that is supposed to be issued for circulation is the Presidential dollar. It is the series that the Mint currently invests its attention on with debut ceremonies and promotional commentary.

Do we need two different series of dollar coins? If so, why not make it three or four? Continue striking the Anthony dollar and sell it to collectors. Why not give life to Frank Gasparro’s Liberty design that was suggested for the dollar coin before Susan B. Anthony supporters hijacked the denomination?

When is enough enough? As long as we cannot answer that question, zombie coins will walk in the land of collectors.

What does bad news really mean?

2008-04-25T09:08:08.6510000-04:00

Food riots in poor countries around the world and de facto rice rationing in California by national retail chains have had a peculiar effect on me. They make me worry about gold.

The human tragedy and human propensity to hoard are worthy topics in their own right, but for myself, the relationship to things numismatic is the important point.

Events like this happened in the 1970s. They happened closer to gold tops than to good buying opportunities for the precious metals. The smart time to buy is when everything is quiet and nobody sees any reason to get into precious metals. The smart time to sell is when everybody is predicting that gold will reach the moon.

Is that why gold closed below $900 a troy ounce yesterday at $886.80?

It is never too late to make an investment. As long as there are people, gold will be bought and sold as a hedge against inflation. But that doesn’t mean markets go straight up forever. In fact, they can take a very long time to reach new highs as gold buyers in early 1980 found out.

Gold can correct and it can correct severely.

Have we reached a point of such speculative excess that gold will stage a significant retreat? Even gold bulls seem to be predicing a routine correction, but could it be more severe than that?

When I talked to Leon Hendrickson of SilverTowne on Saturday he said his smelting and refining operation was buying $3 million in gold a week.

Now large numbers by themselves don’t mean anything, but how much of this metal is being sold by people’s whose household budgets have been stretched to the breaking point by high mortgage payments, high gasoline and high food prices?

We had lines in 1980 to indicate everybody and his brother were selling. Many pundits paid no attention, but the physical selling helped swamp the markets with supply. This time perhaps technology makes this warning more subtle.

I asked Leon where the coin counters were like in 1980 and he said electronic scales are so much better and faster. They are also much quieter.

We don’t hear the clinking and clanking on the floor anymore, but that doesn’t mean significant public selling is not occurring.

Giving up the cent

2008-04-24T08:58:45.3070000-04:00

The cent has been a hot topic of discussion by collectors and the subject of the "Numismatic News" online poll. Both sides of the abolition question weigh in, with the majority still leaning to retention of the historic denomination.

However, opinions aside, are the American people through their use patterns giving the coin up?

I ask the question because I took a look at the total cent production in the first quarter of 2008. It stands at 1,053,600,000. That’s a large number until you start making some comparisons.

If that is the quarterly production figure, it is fair to project that production for the year will be four times that amount, or 4,214,400,000 coins.

That figure is down from the total in 2007, which was 7,401,200,000. The 2006 total was 8,234,000,000.

See the pattern? It seems dramatic, but if you go back to the peak of the last boom times, the year 2000 production totals, what do you think the number is?

14,277,420,000

Wow. Ten billion fewer cents will be produced this year than in 2000. That’s billion with a “b.”

That’s a significant decline no matter how you slice it. I am sure you have heard it pointed out that Coinstar, which puts counting machines in supermarkets, recirculates more cents than was the case in the past.

It is true, but is this factor sufficient to explain the huge mintage drop or is there something else at work?

More credit transactions perhaps? Spontaneous rounding or use of the now common “take a penny” dish at many shops?

World coin collectors are used to seeing inflation in other countries push coins out of use. Is it happening here?

Always look for the next one

2008-04-23T09:05:31.1980000-04:00

Last week while I was attending the Central States Numismatic Society convention I passed a milestone. It was my 30th anniversary of employment here at Krause Publications.

Time flies when you do what you love. I was able to be working on the occasion, attending the sale of the David Queller Family Collection and watching how someone who clearly loves the hobby and his coins lets them go to others.

David Queller offered his blessings to all of the buyers of his coins. What a noble gesture. It is an example that I have seen in numismatics often enough over three decades to know that we are a hobby populated by gracious individuals, who while deeply attached to coins themselves, also see the many other collectors out there who are as attached to their coins as they are and know in their bones the sense of achievement that being able to own significant rarities offers.

No sooner had the last lot sold and the excitement of the moment died away than David Queller was looking forward to working on other coin collections. That’s a real collector. It is also every collector.

In my time here, I have learned that you don’t have to buy an 1804 dollar to achieve that deep sense of satisfaction. It comes to us all as we acquire a 1909-S VDB cent to finish a Lincoln cent set or a 1913-S quarter to finish a Barber set.

Meaning comes from striving toward the collecting goal, no matter how we choose to define it, and taking satisfaction in acquiring the pieces that this goal entails.

Then there is that element of always looking forward to the next purchase and the next set. We are never satisfied, but in this condition we all take great satisfaction.

Too philosophical? Well, on an anniversary such as this, I hope you will allow it. I am still out here as we all move forward together.

Push forward or pause?

2008-04-22T08:54:04.7610000-04:00

It is primary election day in Pennsylvania. This is a good time to bring up an election-related numismatic topic that was brought to my attention by David Sundman, president of Littleton, in a conversation we had at the Central States Numismatic Society convention this past week.

His firm is a direct marketing machine. It does what works and stops doing what doesn’t.

Sundman made the observation that it is harder to sell coins to people during a presidential election year. Do his potential buyers become more skeptical? Are they more conservative with their money? Are they simply hanging back to see which way the political winds blow and evaluating how a change in direction might affect their personal budgets?

Any and all of these are plausible reasons to be a harder sell. This year we might add that a threatening recession might have something to do with it.

But on the other hand, the very factors that seem to make Sundman’s collector clients less receptive to buying coins are also prompting other buyers to step forward to buy up 2008 American Eagle silver bullion coins and cause them to be in such short supply that the Mint is rationing them.

It is also causing other buyers to look at the great rarities as assets that will stand the test of time, weather the current bout of inflation and reward the owner with not only the satisfaction of possessing something few can ever own but also with a favorable return on investment.

So how is your mood? Are you buying coins in your usual fashion? Are you holding back? Are you aggressive and energized, or are you idling in neutral?