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 Friday, November 30, 2007
Not known for its name
Posted by dave

CONECA is a hobby organization that should be more often in the public eye and have more members.

I think this every time I publish a story about a newly reported error coin. Inevitably I receive e-mails and letters asking about errors following the stories. I know this topical area is popular and these contacts just prove it.

However, to be able to properly identify errors and to collect them intelligently takes some education. CONECA, which stands for Combined Organizations of Numismatic Error Collectors of America,  is an organization that can help in this process if hobbyists would take a few minutes to join.

Dues are $25 and I am sure that figure will stop most would-be joiners. It is a shame, because the learning process is not free. You either pay upfront with dues, or somewhere down the line a mistake with a purchase might cost you more than the annual dues ever would.

Yeah, I know it sounds like I am getting on my high horse, but editors are allowed that occasionally in the name of furthering the hobby educational process.

Visit www.CONECAonline.org. See what you think. The time to act is now rather than when you find that funny looking coin that might be worth 25 cents or $250. Becoming able to tell the difference is worth the effort. This is a good place to start.



11/30/2007 9:02:25 AM (Eastern Standard Time, UTC-05:00)  #  Comments [0]
 Thursday, November 29, 2007
Time to face the music
Posted by dave

I have received my invitation to speak at the Sarasota Coin Club meeting held in conjunction with the Florida United Numismatists Convention in January. This will be my third year in a row, so what I have to say must be of some interest to the members.

I enjoy attending. It is nice to see a meeting of a successful club that I otherwise wouldn’t be able to visit and to hear what its members have to say.

This past January I gave a talk with 10 forecasts for this year. I have just one more month to go before I have to tote up my successes and failures.

One of the glaring failures so far has been my gold forecast. Back at the opening of 2007, I figured whatever gold did it would close right round $600, not all that far from where it opened the 12-month period. Better not quit my day job, as the saying goes.

I thought I had good reasons, but apparently the market thinks otherwise. I suppose I can console myself for the next 30 days by saying it ain’t over ’til it’s over.

But I am ready to face the music. What better place than the FUN convention to make a clean breast of things and look forward to 2008? What better group than Sarasota club members to share it with?

Then there’s the truly hard part. I have to come up with 10 more forecasts. Perhaps I should leave gold alone.



11/29/2007 9:04:55 AM (Eastern Standard Time, UTC-05:00)  #  Comments [1]
 Wednesday, November 28, 2007
Gold a good target for rumors
Posted by dave

Everybody knows that the U.S. government is a big holder of gold bullion. It used to be said that the 260 million troy ounces that it has represents one-quarter of all the gold that was ever mined.

Since there has been a lot of gold mined since I first read that statement, the proportion is probably lower, but that is still one heck of a lot of gold.

Such a hoard attracts commentary from various and sundry sources. Every so often there is a rumor that the gold in Fort Knox is not really there. Back in the 1970s the rumor was so intense that there was actually a news conference to show off the stacks of 400-ounce gold bars. Numismatic News published the news and the photos.

Nowadays, the rumors take new twists. The government might still own the gold, it is said, but it has been leased out to the market to try to depress the price of the metal.

Well, if that is the case, they are doing a mighty poor job of depressing the price. That rumor is right up there with the war in Iraq was about the United States getting the oil. If we were acquiring oil, we sure did a poor job of it as any visit to a gas station will tell you.

But that is the nature of rumors.

In addition to rumors, there are conclusions based on snippets of information that don’t really apply.

Some e-mails I have received recently in response to our online poll question basically say that if the government owns so much gold that it acquired for $35 an ounce or less, then gold coins from the Mint shouldn’t be so expensive. After all, the government gets a profit, doesn’t it?

Well, the Mint doesn’t raid Fort Knox for its gold. It must buy it on the open market like everyone else. The one limitation is that legislation authorizing American Eagles specified that the gold the Mint buys must be mined within the country.

I don’t expect the rumors and opinions about U.S. government gold to disappear. If they did, that wouldn’t be any fun at all, now would it?



11/28/2007 9:00:36 AM (Eastern Standard Time, UTC-05:00)  #  Comments [0]
 Tuesday, November 27, 2007
Keep that skeptic in you sharp
Posted by dave

Wall Street calls them “pump and dump” schemes. What do coin collectors call them?

When you see someone online saying this or that coin will hit a certain price by a certain time, there is a possibility that the person making the forecast is not just being helpful. The writer might own what he is touting and hopes to make a quick profit on it.

If a group of Lincoln cent collectors were comparing notes online as to where they expect the price of XF 1909-S VDB coins to go over the coming year, that would be one thing. The presumption here is that they share a common interest, they are knowledgeable buyers and that all or a significant number of them already own the coin.

What if a writer posting an online opinion just happens to own a significant number of whatever it is he is touting?

Always ask yourself whether the opinion expressed online is a candid observation, or whether the person could own a large supply of the specific coin being mentioned. He would naturally like to unload them at a profit. You are the potential buyer who can help him reach his goal.

This time of year people tend to evaluate how their investments did in the prior year. Stocks look pretty saggy. Now is a good time to tend to your healthy skepticism so that you are inoculated against pie-in-the-sky coin purchases.

It is one thing to buy something for a collection. It is also fine to take a flier now and then as long as you know what you are doing. But beware the hot tip if it is in an area you cannot independently verify. Somebody might just want to dump the ready supply on you.



11/27/2007 9:04:39 AM (Eastern Standard Time, UTC-05:00)  #  Comments [0]
 Monday, November 26, 2007
Is Mint lucky or good?
Posted by dave

Back safe and sound from your holiday weekend? Good.

I wasn’t expecting to be in the office, so this was prepared ahead of time. The day before Thanksgiving, I checked www.coinflation.com to see what the current metallic values were for cents and nickels.

Prices have been tumbling with the stock market. Because copper and nickel are industrial metals, demand is primarily from users who grow or contract with the overall economy.

With the stock market going into panic mode reasonably regularly since late July, it probably should be no surprise that metals are making their way lower regardless of what gold is doing.

Copper has fallen below $3 a pound to $2.9386, taking the value of the old 95 percent copper cent to approximately 1.95 cents each.

Nickel has declined to $13.3802 a pound. The five-cent coin is now worth 6.1 cents in copper and nickel metal. We have come a long way down since spring when I was writing that the coin was worth nearly 10 cents.

The real shocker for me and anyone who doesn’t follow the market daily is the price of zinc. It is less than $1 a pound at .9943. The copper-coated zinc cent that has been made since 1982 is now worth .57477 cents each. The Mint might actually be able to make a profit again at that level. Certainly there is no threat of melting for this particular coin.

If metal prices keep declining we will have to ask ourselves: was the Mint lucky or good when it did not rapidly move to change the alloys when the price increases first threatened the viability of the cent and nickel coins. What do you think?



11/26/2007 9:02:48 AM (Eastern Standard Time, UTC-05:00)  #  Comments [2]
 Wednesday, November 21, 2007
Not yet gone to grandma's?
Posted by Dave

If you are reading this on the day it was written, you haven’t gone over the river and through the woods to grandmother’s house yet for a nice juicy turkey dinner.

It is hard sometimes to keep focused on the coin hobby when family obligations beckon, but let’s try.

First up, I need to point out a math error in my Monday blog. I slapped my forehead yesterday when I noticed it. It involved the prices of the Dolley Madison First Spouse gold coins. Everybody now knows they went up in price and many consider the increase a substantial one. I wrote that the increase was 19.14 percent on average. I should have written 23.67 percent. For some reason, I divided the difference between the higher and lower prices by the new higher number rather than the lower figure from which the comparison was being made.

The outcome does not alter any of the points I was trying to make, but it is an indication that I was sloppy Monday morning.

Second up, I see that the “W” uncirculated silver American Eagle coin has gone off sale from the Mint Web site. That is likely due to a depletion in the supply rather than the cost of silver bullion. As of this week’s Mint Statistics, the Mint had sold 558,810 of the coins. That figure is not as high as the 746,421 proofs sold so far, but it is a substantial number and few can complain that they didn’t have adequate chance to buy one.

Other items will be going off sale in the coming weeks as supplies run out. These are primarily bullion-related coins. The Mint’s bullion distributors are usually given the chance to take a last crack at inventory before the year closes. The weekly increase in gold and silver American Eagles and Buffalo gold totals seems to indicate that the pipeline is being filled.

The holidays are a popular time for bullion coins given as gifts. We will see if the higher prices lessen the demand this year or increase it.

I might have messed up the math Monday morning, but there is one figure that I know is correct. I already know how many pieces of pumpkin pie I want to eat tomorrow.

Have a happy and safe Thanksgiving. The next post will be on Monday morning.



11/21/2007 9:01:12 AM (Eastern Standard Time, UTC-05:00)  #  Comments [0]
 Tuesday, November 20, 2007
White House event honors Dolley Madison
Posted by Dave

The first thing I did after I signed in on my computer was go to the U.S. Mint Web site to see if the First Spouse gold coins for Dolley Madison were still being offered for sale.

I had my answer as soon as the Mint’s home page came into view. There was no immediate sellout as was the case for the first three First Spouse coins.

The Mint was actually advertising the Dolley Madison offering with images and a news crawl moving underneath to call attention to yesterday’s ceremony at the White House with First Lady Laura Bush.

Mint Director Ed Moy was present as was a Dolley Madison re-enactor, who was also involved in a ceremony last year. She must be good at portraying Dolley Madison.

The fourth First Lady of the United States saved the Gilbert Stuart portrait of George Washington from destruction when she took it just ahead of the advancing British army that burned the White House, the Capitol and other buildings in the city in 1814.

The burning of the White House was a low point for the American republic, but Dolley’s reputation was made by her plucky behavior. It did not hurt that the nation’s honor and situtation were retrieved by a peace treaty signed just a few months later that basically said, “Never mind.” The country did not have to pay the price of the significant defeat that led to the loss of the capital city and Andrew Jackson’s victory in the Battle of New Orleans after the treaty was signed made it seem like the United States had won the war.

How plucky will collectors be with Dolley Madison’s coins? As I wrote yesterday, prices are up. If historical reputation means anything, Dolley Madison’s coins deserve a sellout, but I know it doesn’t work that way.



11/20/2007 8:59:09 AM (Eastern Standard Time, UTC-05:00)  #  Comments [1]
 Monday, November 19, 2007
Check those checkbooks
Posted by Dave

Brother, can you spare $20,798,000?

That’s what the Mint hopes to get from coin collectors when the Dolley Madison First Spouse gold coins go on sale at noon Eastern time today.

This is more than the Mint asked for the Martha Washington and Abigail Adams and Jefferson Liberty coins that went on sale in June and August, respectively.

Rapidly rising gold prices have forced the Mint to increase the average sales price by 19.14 percent. I write average because that compares the sales dollar totals from prior offerings and assumes the current offering will sell out in the same even 20,000-coin increments.

It may not work out this way. It is possible that the Madison First Spouse coins will not sell out as the others did. The price hike might stop would-be buyers. The less active secondary market for First Spouse coins might also slow down buyers who plan simply to acquire the coins from the Mint for the sole purpose of immdiately selling them online.

Perhaps more proofs will sell this time than uncirculated coins. It has been a bit unusual for three offerings in a row to go exactly 50-50 when other programs see proof coins preferred by roughly 3-1.

The figure $20,798,000 may not sound like a lot in an age of government budgets in trillions of dollars, but the figure is real money to real collector budgets. Collectors have already ponied up $50,454,000. If the Madison coins sell out, that totals $71,252,000.

With a minimum run of 10 years, collectors collectively will be asked for $712,520,000 for First Spouse coins. That number is almost three-quarters of a billion dollars and it presumes no further rises in issue prices.

This is a large number to ask of collectors. Can they spare it? We’ll see.



11/19/2007 9:02:18 AM (Eastern Standard Time, UTC-05:00)  #  Comments [4]
 Friday, November 16, 2007
Got a good home for a 1958-D?
Posted by Dave

The parking lot was particularly empty-looking as I came to work this morning. As the year comes to a close, employees are trying to use up their remaining vacation time before losing it and also hunting season begins tomorrow and a number of the staff who work on our outdoor titles are avid hunters.

Coin collectors are hunters of a different sort, but in Iola they can benefit from, or at least be interested in, the new change that comes our way from hunters passing through town for the deer season.

I received a 1958-D nickel in change Wednesday. I don’t usually get nickels that old. I also tend to treat Jefferson nickels as I did in 1968. If the coins aren’t silver war nickels, mintmarked from the 1930s, or a 1950-D, I just pass them along. The full-step trend passed me by on a personal level. The new designs since 2004 I look at and appreciate as I spend them, but I still spend them.

What was particularly startling about the 1958-D nickel and the reason I looked at it first among the coins in my day’s pocket change was it looked like it had only been in circulation briefly. The Mint luster was vibrant, and the much higher relief of the older coin stood out.

I examined it. As my trifocaled eyes were in that split second moment of focusing, I saw the “8” first and then tried to make out what was the “5.” I would grade the coin AU-55. Unfortunately, that is still a big “so what?” What can I do with an AU 1958-D nickel? Well, I showed it to fellow staff member Tom Michael after work. He agreed that you don’t see these kinds of coins in change anymore.

He wondered what Whitman album had been raided or cashed in at a bank because the heirs of whoever saved it didn’t know what else to do with it.

It is a story about the coin neither of us will ever know. I will spend it. Perhaps someone who is trying to collect Jefferson nickels from change will get it, appreciate it and give it a good home in their own Whitman album.



11/16/2007 9:03:08 AM (Eastern Standard Time, UTC-05:00)  #  Comments [0]
 Thursday, November 15, 2007
Ends approaches for Mint products
Posted by dave

This time of year it is important for every would-be buyer of Mint products to keep an eye on the calendar. Bullion-related sales suspensions aside, the routine of the Mint is for certain dated products to reach a sales end point as inventories are run down.

The first overt indication that this is happening occurred for me yesterday. I have been asking the Mint about when the American Eagle supply for its bullion network will likely run out. The Mint issues a bulletin and gives the distributors a final chance to acquire additional supply. Some years when demand is low, supplies last right through to the close of the calendar year and even are still available early in the new year. That is what happened at the beginning of 2007.

Well, while my attention was fixed on the American Eagles, the first Mint indication of a routine conclusion to some programs arrived yesterday with an e-mail saying that it would be the two current commemorative coin programs that would come to an orderly end Dec. 14.

Buyers who want the Jamestown 400th anniversary $1 and $5 coins and the silver dollar for the Little Rock 50th anniversary of desegregation of public schools have been warned. We are in the final month of sales. This termination of sales is not because demand has pushed mintages up against the legal ceiling. Hardly more than half of the $5 gold pieces have been purchased in the Jamestown program and the silver dollar sales numbers add up to a bit more than two-thirds of the maximum possible.

There is even more room in the Little Rock numbers. The roughly 178,000 that have been sold in all the various options are little more than one-third of the possible 500,000. Interestingly also are the possibilities raised when the sales are terminated. The Little Rock Coin and Medal set is close to reaching its 25,000 sellout number, but it has been on sale for many months. The American Legacy set, which includes a silver dollar from each commemorative program, currently has seen 18,689 sets sold out of a possible 50,000. Will the 50,000-mark magic that has spurred buyers to purchase many other special Mint packaging options cease to work? Let's watch over the next four weeks and find out.

However, while you are watching the commemoratives, don't forget to keep an eye on the American Eagles. Annual sets that aren't specifically legislated by Congress will be offered either until supplies run out or the 2008 sets are available. If you are a potential buyer of the offerings that will conclude, don't wait until the last minute and happy hunting.




11/15/2007 8:59:44 AM (Eastern Standard Time, UTC-05:00)  #  Comments [0]
 Wednesday, November 14, 2007
Proof set and lunch neck and neck
Posted by Dave

I was sitting all alone in the Crystal Cafe for lunch yesterday. It was a slow day. There were just a few other people there eating. No one to really talk to but the waitress.

As I munched away, my mind wandered back to the more than 25 years’ worth of business day lunches that I have consumed on the premises. Naturally, my thinking has its own peculiar brand of numismatics and economics thrown in.

A quarter century ago, the full lunch, including coffee and sales tax was $3.15 plus tip. Now, the full lunch is $8.60 plus tip. I don’t have coffee with lunch any more. It is charged separately and adds $1.27 to the bill. I usually walk away for $7.33 plus tip.

The current full lunch cost is 2.73 times the former cost. That is quite a steep jump. Had I been a new retiree 25 years ago, I would need almost three times the income now for lunch purposes.

As a coin collector, I face similar increases, though probably for different reasons. Back in 1982, the standard proof set was $11. Now it is $26.95. That is 2.45 times the price of 25 years ago.

These are remarkably similar rises. It can be argued that the proof set is an even better deal than the price indicates. That is because this year’s set features five $1 coins and five state quarters. The 1982 set by contrast was a pretty small set, with just a cent, nickel, dime, quarter and half dollar in it. That’s five coins then versus 14 now.

Today’s proof set is a little like buying a piece of pie and getting the ice cream and coffee thrown in for free.

It is a good thing I am working to take these price increases in stride. I am sure the Mint does not price its coin offerings on the basis of the cost of a meal at the Crystal Cafe, but these numbers do seem to indicate that we are all in the same boat floating along on the same inflationary ocean.

One thing I must remember is I could eat more pie back in 1982. Ah, those were the days. That’s a whole other set of numbers.



11/14/2007 8:59:48 AM (Eastern Standard Time, UTC-05:00)  #  Comments [0]
 Tuesday, November 13, 2007
Almost time to say 'Hello, Dolley'
Posted by Dave

The fourth and final Presidential dollar coin of 2007 will be officially released to circulation in two days on Nov. 15.

While I suppose I should be reflecting on James Madison as the Father of the Constitution, I find my mind wandering to his wife Dolley and the question of whether her First Spouse gold coins will sell out.

The market has a way of overcoming sensible historical reflection with the question, “Can I make money on that?” This question isn’t asked by just the eBay posse, but they certainly are the leading proponents of buying Mint products, charging them on credit cards and dumping the purchase on eBay before either the bill has arrived or delivery has taken place.

My intentions were certainly good. I even bought another book about the Founding Fathers to learn a little more about them. That has been a standard approach to my reading this year. I haven’t limited myself to it, but I keep coming back to the topic of America’s early years.

Dolley Madison is worthy of more thought than the First Spouse buyers might give her. She not only saved Washington’s portrait ahead of the British burning the White House in 1814, she was a wonderful and complementary personality to her husband, who was painfully shy. Imagine that. A successful politician who was shy. We can thank his wife for some of that.

Will the gold First Spouse coins sell out? I don’t know. But they do honor someone worthy of the attention.



11/13/2007 8:54:37 AM (Eastern Standard Time, UTC-05:00)  #  Comments [0]