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 Friday, June 15, 2007
Get thrills and chills watching the nickel
Posted by Dave

When we last left our heroine, she was tied to the railroad tracks and the locomotive was building speed as it raced toward her.

Whoa. Wait. Wrong story. Wrong century.

It was just weeks ago when the prices of copper and nickel combined to make it appear that the metallic value of America’s five-cent piece would soon hit 10 cents, or double its face value.

Then a funny thing happened. The prices of the two metals, which are in heavy demand in China, declined, taking the metallic value of the coin to 8.4 cents.

I wrote in my Class of  ’63 column in Numismatic News that the 10-cent level might be a tipping point at which people would seriously considered hoarding the coin despite the Mint’s prohibition on melting them.

With the locomotive hurtling toward that price level, it looked like we would soon see if my theory was corrrect.

Then the train basically stopped and started going backwards. This halt could be temporary. Copper and nickel both jumped yesterday. I make it a point to check a Web site that recalculates the metallic values of coins on a daily basis to keep track of things. It is called COINflation.com. Take a look at it at http://www.coinflation.com/

See what you think. It is a handy Web site and that train might just start moving toward the 10-cent price level for the nickel coin again.

Come back next week and see the next chapter. Will our heroine escape her peril?



6/15/2007 9:01:23 AM (Eastern Daylight Time, UTC-04:00)  #  Comments [0]
 Thursday, June 14, 2007
And so's your old man
Posted by Dave

“I’m going to tell mom on you.”

That childhood threat is the closest thing I can think of to characterize the present state of the American Numismatic Association campaign to elect its new board of governors.

The hyper-legalistic ecstasies being engaged in by some candidates and their supporters makes me wonder what kind of ANA they really do want.

President-to-be Barry Stuppler sent out a campaign mailing to gain votes for would-be governors that he favors. The mailing has been called a violation of bylaws by some because it says “ANA Election Material” on the envelope.

Give me a break.

His supporters counter that Cliff Mishler has put his campaign literature in his privately created and funded newsletters for local volunteers at the Milwaukee summer convention.

Horrors.

We have an election for the ANA board of governors and some candidates are actually campaigning. What is this world coming to?

What is particularly curious about this whole thing is the anti-incumbent faction opposing Stuppler primarily coalesced as opposition to proposed bylaws changes that would have created a nominating committee and ended most forms of election campaigning. The anti-incumbents say ANA members would be disenfranchised by these proposed changes.

That charge may be true, but then anti-incumbents should behave as if they believe in campaigning and are not simply hurling empty words at their opponents.

No formal complaints of bylaws breaches have been filed with ANA headquarters yet, so perhaps this too shall pass.

The election ends July 19.



6/14/2007 8:56:22 AM (Eastern Daylight Time, UTC-04:00)  #  Comments [4]
 Wednesday, June 13, 2007
Why can't banks get me recent Sacs?
Posted by Dave

Why are there coins? What purpose do they serve?

I ask these existential questions because of an inquiry that arrived in my e-mail.

The inquiry was a perfectly legitimate question from a collector point of view. What was asked was why people could not get current Sacagawea dollar coins from banks instead of paying premium prices to order them from the Mint?

Good question. In recent years it seems that the only reason coins are produced is to sell them to collectors. That, however, is not their fundamental purpose. Their purpose is do be used in commerce on a daily basis for the millions upon millions of cash transactions that occur.

Coins are supplied to merchants through the banks. At the top of the heap is the Federal Reserve, which places orders for coins as they are needed by its member banks. This is the mechanism through which coins are sent to do their duty in commerce.

Any bank that needs dollar coins since 2000 have been supplied Sacagawea coins. They struck so many in 2000 and 2001 that supplies are still plentiful. In the old days, which are not all that long ago, when supply backed up, coinage would cease. This happened with the Anthony dollar after 1981. It wasn’t until 1999 when the surplus supply was finally used up, that more were struck.

Well, if a bank orders coins today, it will either get the 2000 or 2001 Sacs or the new Presidential dollars, so average collectors cannot acquire recent Sac dates from their familiar and friendly teller.

With the Sac dollar surplus, the Mint didn’t simply shut down production. It decided to make dollar coins a profit center and continue to produce a few. It knew collectors would buy them for more than face value. This helps pay for a piece of the Mint’s overhead and perhaps justifies increasing marketing budgets to collectors. As long as there is a supply of older coins available to be used in commerce, the Mint won’t ship out coins with the new dates. It doesn’t have to by the way the banking system works and it doesn’t want to in order to protect its collector profits.



6/13/2007 9:01:38 AM (Eastern Daylight Time, UTC-04:00)  #  Comments [1]
 Tuesday, June 12, 2007
Go for it, Idaho
Posted by Dave

The Idaho quarter was released to circulation last week and bags and rolls of the coin are being sold to collectors via the Mint’s Web site.

I am waiting for word that there will be an official launch ceremony in Idaho, but as of yesterday afternoon, there was nothing from the U.S. Mint.

It can be argued that such ceremonies are old hat and unneeded. I disagree. Each state is marking its own history in its own way. States even find their own way to have internal disagreements about quarter designs. That’s the American Way. There are 50 states and there should be 50 unique ceremonies to remember the quarter program and each individual state’s history.

Numismatic News staff has not been able to attend them all – not even close – but we do our best to provide a look at each ceremony. It is that state’s rightful place under the numismatic sun.

Mint directors have come and gone, but when a program lasts 10 years, that is to be expected. It is gratifying that I personally have made it this far into the process. We are in the 9th year. Next year is the finale. A whole decade will have passed. Amazing. Kids who started collecting the coins in 1999 will have gone off to college.

Perhaps I will be able to persuade my superiors that the final ceremony, which will be in Hawaii next year, is worth covering in person. Hey, that’s the ticket. Perhaps other collectors will feel the same way. After all, it will be late October or early November and it wouldn’t be a particularly hard choice to make, Iola vs. Honolulu. Perhaps I had better write the governor immediately.



6/12/2007 8:57:20 AM (Eastern Daylight Time, UTC-04:00)  #  Comments [0]
 Monday, June 11, 2007
What do interest rates matter?
Posted by Dave

I have some of my best ideas in the early morning between the time I take my first sip of coffee until I finish shaving. I often come into work and start a conversation with co-workers with the preface that I had an idea while shaving.

If you want to know how often that happens, I guess you will have to talk to Dave Kranz.

Anyway, this morning a number of things were rattling through my brain as the Monday morning routine unfolded.

One of the interesting comments made by Dwight Manley during his hearing testimony in Long Beach, Calif., May 29 ,was that he regularly loaned money to Don Kagin so that he could do deals. Interestingly, he said he loaned the money at “high rates of interest.” He did not say how high was high. It was a point that didn’t play a role in the greater question at hand, but it found a hook to hang on in the back of my mind.

This particular hook was right next to the hook where remarks made by David Hall in January were mentally placed. At a talk at the Florida United Numismatists convention, Hall warned against buying too much on borrowed money and noted that he was a lender.

There is nothing unusual in the lending of money in this business. The question is what percentage of the business is financed in this way this year as compared to 10 or 20 years ago. If the percentage of the business financed with borrowed money is greater now, that would make numismatics more susceptible to the ebb and flow of business conditions generally.

I remember when gold buyers and coin buyers used to scoff at every increase in the prime rate in the late 1970s. Rather than retard their business, rising interest rates seemed to egg buyers on. Prices kept rising. Deals kept getting done. Of course, when rates hit 20 percent, even the scoffers got brought up short, but this was more the secondary result of the free-fall in the economy than with buyers cutting back because the money that financed their deals cost more.

So what’s my point? Well, if numismatics is dependent on borrowed money to a larger degree than formerly, then the fact that interest rates jumped last week to 5.10 percent on the benchmark 10-year Treasury note might be a signal that the current party might be closer to ending than what similar financial conditions might have induced years ago.

Are you a more enthusiastic buyer today than you were last year at this time or six months ago? Let me know at david.harper@fwpubs.com.



6/11/2007 9:00:45 AM (Eastern Daylight Time, UTC-04:00)  #  Comments [0]
 Friday, June 08, 2007
Let's go ahead and panic
Posted by Dave

Fear is contagious. Fear can be the physical kind. Fear can be of the kind that causes financial panics in securities and commodities markets. Fear can even sweep a bourse floor and stop dealers from making deals that five minutes before would have been no-brainers.

My office saw a demonstration of the physical kind yesterday. The fun and games began when the National Weather Service announced that conditions were right for the formation of severe weather.

That kind of announcement is unusual. I thought it was silly. Imagine that. Late spring in Wisconsin, a front is going through and I need the National Weather Service to tell me severe weather is possible? Right.

Some public events were canceled in surrounding communities.

That set off the chattering in the morning. By afternoon, co-workers were on their cell phones. They were checking their Internet. The front was in Eau Claire in the western part of Wisconsin. It was supposed to reach us by 3 p.m.

The front reached Marshfield. There was water in the streets. Ooh, water in the streets of a Wisconsin city in a rainstorm. Must be global warming.

People were deciding to go home early to ride out the storm there. The building started emptying.

At 3 p.m. no storm. I went out for my usual walk and the sun was shining. There were dark clouds to the west, but no biggie. It’s June in Wisconsin. When I came in I commented about the sunshine.

Never mind, the storm would reach us by 4 p.m. It didn’t.

By this point most everyone in my area had left. I was working on a World Coin News feature about coin collecting in Vietnam.

A person came around to check who was still in the building around 4:30. I certainly was. There were others. I walked toward photo scanning and found someone doing – guess what – talking on a cell phone.

Still no storm. About 10 minutes after 5 p.m. I finished up Vietnam and decided to go home. Guess what? Sunshine.

I went home. I rented a movie on the way across town at the Depot Street Station. If it is going to rain, I’ll watch a movie, I thought.

You know what? It didn’t rain in Iola at all. There was softball-size hail in Wisconsin Rapids 41 miles west, southwest of us. It was pea size in Stevens Point, 22 miles west. Some power lines were down. We lost the usual barn further north, though it was a pole building rather than the familiar red wooden structure. All in all, it was a typical late spring weather pattern.

How much work was lost in this state yesterday I don’t imagine we will ever know.



6/8/2007 9:03:53 AM (Eastern Daylight Time, UTC-04:00)  #  Comments [0]
 Thursday, June 07, 2007
Errors that get mainstreamed are winners
Posted by Dave

Errors have been much in the headlines this year. The new Washington Presidential dollar features a plain edge variety that looks like it will become a permanent part of collector lives. I write “looks like” because it is still relatively new and collector habits and traditions build only over long periods of time.

For every truly long-term collectible error that arrives in numismatics, there are dozens, even hundreds, that will never make it past a relatively short existence in online auction listings from people who “have never seen anything like it,” create a fancy nickname for it, but of course, they don’t really know much about this sort of thing you understand.

Buying these flashes in the pan would be a quick way to the poor house if you chased them all. Fortunately, most collectors don’t. Many of the current error buyers will go on to the next fad someday and their heirs will find the hot errors of 2007 in a drawer somewhere. I shudder to think what they will be worth.

If you find yourself attracted to errors, I don’t want to dissuade you from participating in a very interesting field. However, you might consider checking the errors that have stood the test of time. You will have better luck preserving your investment with these coins going forward and they offer you the possibility of solid investment gains.

What coins am I thinking of? Well, look at the 1955 doubled-die cent and the 1972 doubled-die cent. Both have been embraced by the mainstream hobby.

Check out the 1922 plain cent. Whoa. Why do I mention that? Well, it was an error once. Now it is mainstream. The funny part is if collectors knew in 1922 what they know now, this coin would not be considered collectible.

The same thing is true of the 1937-D three-legged Buffalo. It is now a gilt-edge classic collectible that never would have gotten off the ground if today’s knowledge had prevailed when it was issued.

It may be fun to try to pick the next winner online. It may be interesting. But there are too many elements of lottery in it and commercial hype for this to be a sound collecting or investing strategy. To truly pick the winners going forward, look also to the winners of the past.



6/7/2007 8:57:20 AM (Eastern Daylight Time, UTC-04:00)  #  Comments [0]
 Wednesday, June 06, 2007
Are you sure you want to talk to me?
Posted by Dave

Remember the TV sitcom “Cheers?” My office is a little like that. Everybody knows my name.

There are advantages to being known. When I am covering an event, it can help to open doors, get a photograph or a quote that might otherwise not be available.

I remember my first days here when everybody didn’t know my name. I have worked with new staff who have telephoned people for a quote only to be told that they should do a little more research and then call back.

So, being known is an advantage.

It is also a disadvantage. No, I am not hounded by autograph seekers or stalking photographers. But I do get a lot of communications that come my way solely because my name seems to be the only thing the other party can think of.

I had a phone call Monday from a fellow who wants to buy the 2008 U.S. Coin Digest. He called me because my name is on the book and he wanted to know if the book had a hard cover. The sales materials said it had a hard cover, but he didn’t want to act on that information. He wanted to be personally assured that it had a hard cover. If it had a soft cover he would buy just one copy. For a hard cover, he would take three.

I could give him the information, but I cannot sell him the books. I am not in sales. I had to send him elsewhere.

Some readers send me their subscription problems. I can be sympathetic, but I cannot fix subscription problems. I can only send them to the subscription department.

None of this would be a particularly big deal except where time matters. I am not always here. Some people have sent their free weekly classified ads to me by name or by title. When I am out of town, they sometimes don’t get noticed or entered.

I have occasionally found checks in my mail when I have returned from a week away. They were mailed to me by name and that’s how the mail room routes it.

If you are in a hurry and want to do business with Numismatic News, contact the department you need the help from. While it is always nice to chat, where speed is essential, I am not the one to contact.



6/6/2007 9:01:49 AM (Eastern Daylight Time, UTC-04:00)  #  Comments [1]
 Tuesday, June 05, 2007
Let's keep checking this out
Posted by Dave

One of the tasks I perform is to edit each annual edition of North American Coins and Prices. I had a heads up from the promotions department to tell me that the staff was preparing material for the release of the 2008 edition of this reference book later this summer.

This will be the 17 edition, so you can see I have been at it awhile. Part of the process is to take a look at the prior edition to try to evaluate what I thought worked and what I thought I ought to follow up on to make the next edition even better.

My eye stopped on the special chapter that I created to introduce collectors to the American Buffalo one-ounce gold piece and its proof collector version.

In the chapter I recounted the opening of the sales period for the proof 2006 Buffalo coin.

“For six hours it was a fight for anyone to get through. In the first 24 hours, the Mint sold 50,000 of the new proof American Buffalo coins.”

The fight, of course, was to order the coins online. The Mint’s Web site, which is quite good, was strained by the onslaught of eager buyers.

This year, the onslaught didn’t occur. The numbers released by the Mint show that in roughly the first five days, which included the Memorial Day holiday weekend, just 9,700 of the 2007 proof Buffalo coins were sold.

In the first five days last year, the total ordered was 75,000 and in 10 days it had risen to 100,000. Those were incredible numbers. The Mint put the coin on sale and 10 days later, it had “persuaded” many collectors to send in $80 million to buy 100,000 one-ounce Buffalo proofs. That is an achievement to be proud of.

Lightning did not strike twice for the Buffalo program. Yogi Berra said it ain’t over ’til it’s over, so I will be eagerly monitoring the sales figures as they are generated from week to week. Join me in my Mint Statistics column in Numismatic News and see where we go from here.



6/5/2007 8:59:08 AM (Eastern Daylight Time, UTC-04:00)  #  Comments [0]
 Monday, June 04, 2007
Joke or advice? Go figure
Posted by Dave

There is an old joke, or perhaps you could call it sterling advice about making gold market (or any market) forecasts. If you predict a specific price, don’t tell your audience when it will happen. That way, you can never be proven wrong.

At least once each year, I don’t follow that advice. I write a weekly column called "Class of ’63" in Numismatic News. In recent years, I have used an end-of-the-year column to forecast where I think precious metals are going.

At the end of 2006, I forecast that gold would have a mild downturn in 2007 and close the year at $600 a troy ounce. At the close of 2006, gold was at $635.20.

That forecast looked like genius for about three days. Gold dropped down to $604.90 and since then has shot higher. It has been as high as $692 on April 20. My forecast still has more than half a year to run before you can determine whether I was right or wrong. We’ll see.

However, I bring this topic up this morning because of a conversation I had while I was in Long Beach, Calif. Last Wednesday night I was one of five people at dinner. ANA Gov. Michael Fey sat to my left. We conversed about a number of topics during the course of the evening. It was enjoyable.

At one point, he turns to me and asks where I thought gold was going. I replied that I thought it might go down a little. He said he thought it was going to go up. That was about it. Neither one of us elaborated and we were drawn back into the general table conversation.

What happened Thursday? Gold went up. What happened Friday? Gold went up. It rose $18.10 during those two days, closing at $671.20. Judging from my table conversation, I couldn’t have been more wrong. Judging from my annual column, I still have more than half a year of time left.

Check back with me at the end of December when I do my self-evaluation. At that point, I won’t be able to use timing as an excuse.



6/4/2007 9:02:13 AM (Eastern Daylight Time, UTC-04:00)  #  Comments [0]
 Friday, June 01, 2007
Nothing matters but deadline
Posted by Dave

Coffee was especially welcome and necessary this morning. Yesterday I traveled back from Long Beach, Calif., where I had covered the May 29 hearing conducted by the American Numismatic Association board of governors at which a complaint lodged by Dwight Manley against Don Kagin was handled. Unfortunately, I did not get back to Iola, Wis., until 1 o’clock this morning, so I am somewhat less than sharp as a tack.

Weather delays backed up the air traffic system in Chicago, so I was delayed by around two and a half hours.

I am not unhappy, though. I met deadline yesterday with my story for both the Numismatic News print run to Shawano and for the www.numismaticnews.net Web site.

It might seem surprising that I did not return to my office until Friday when the hearing was conducted on Tuesday. Part of this is certainly the travel factor, but mostly it was due to the waiting factor.

Though the hearing went from roughly 9 a.m. until 5:40 p.m. Tuesday, I spent the most time in the process simply waiting. I waited for the board to come out of its deliberations. This it did at roughly 7:30. I write “roughly,” because I was not parked outside the closed meeting room door. I was sitting in the hotel bar just off the lobby and I looked at my watch when I noticed the ANA president enter the area. I was eager to find out the result, but that entailed more waiting.

Executive Director Christopher Cipoletti soon arrived and told me that he would begin writing the decision document the next morning. It would be circulated to the six governors who decided the issue, the two parties would then be notified and then, and only then, would a public announcement be made.

Chasing the board members turned out to be harder than I expected. Both Alan Herbert and Prue Fitts and traveled back to their homes Wednesday, so the draft had to be passed by them electronically. Barry Stuppler had to undergo a previously scheduled medical procedure.

By the time all was said and done, it was very late Wednesday night. It was so late in fact, that I was sleeping. I did not finish my assignment until Thursday morning, but that made the paper and that is all that matters.



6/1/2007 9:06:25 AM (Eastern Daylight Time, UTC-04:00)  #  Comments [0]
 Thursday, May 31, 2007
Presidential dollars succeed, sort of
Posted by dave

The jury may still be out on the eventual success of the Presidential dollar series. Only two coins have been released so far. Americans may never use them as a circulating medium of exchange. Collectors could grow tired of them.

However, one measure of the success of the program is already in. Full-page ads in non-numismatic newspapers made up to look similar to something official from the government appeared with the release of the Adams dollar.

“Public Notice of New United States Coins” read one that I saw in all capital letters.
A photo of two men in suits displaying a supposed set of Presidential coins establishes the “feel” of the ad. One man holds up a large piece of what looks like heavy cardboard with a photo of the White House on top and coins below it. Readers are urged to put in their $28 “claim” for it and get the first four of the Presidential coins for free.

Obviously, the cost of the holder must be quite large if you can get a $28 claim on it plus $4 in coins.

If ads like this appear, then I must presume that Americans are responding in sufficient numbers to cover the costs of the ads and encourage the firms that place them to keep doing it. That is an indirect affirmation of the appeal of the new Presidential dollar coins.

American marketing is nothing if not creative, but marketers won’t do something if it isn’t profitable.

The language of these ads has evolved over time as the Mint has acted to both raise its profile and reduce the possibility of confusion of its identity with purely private entities.

But it is a wonder to me that so many Americans don’t think of banks first when a new coin comes along. Perhaps that is an indictment of the nation’s banks. Supplying coins to customers is one of banking’s basic functions.

Americans claim they don’t want to use dollar coins to spend. They want paper instead, but at least some of these very same Americans will put their “claims” in when a private firm declares that it has a supply of new dollar coins. How interesting.



5/31/2007 8:45:17 AM (Eastern Daylight Time, UTC-04:00)  #  Comments [0]