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 Tuesday, March 18, 2008
Get a new $5 yet?
Posted by Dave
Have you gotten a new $5 Federal Reserve Note in your change yet? The new bill was introduced last week on March 13. It has not made it to Iola yet. Debbie Bradley inquired about it after the official introduction when she did some routine banking. Lack of the new $5s in Iola is no real surprise. We are at the tail end of the distribution system and I sometimes think that old $1 bills come here to die because they can be so ratty. Nobody wins any prizes for being the first to get one in change, but there is a certain psychological satisfaction in being the first to report one to fellow collectors and passing a personal judgment on how it looks and whether the anti-counterfeiting devices are easy to use. Americans are not easily educated about money. That is peculiar considering how important money is to everyday life. The iodine pens increasingly shorten the useful life of many bills. There is far less thinking involved with a pen than checking a security strip or a watermark. The need for fairly crisp examples in ATM machines adds further strain. Then there is the simple fact of the new designs themselves. It used to be said that $100 bills had a life of 18 years. Well, that isn’t true anymore. The new design arrived in 1996 and the old designs disappeared very rapidly, led by an almost complete rejection of the old designs in places like Russia as soon as the new ones appeared. When the next new one comes out, I expect a similar departure schedule for the current notes. How long will the current $5 last in the face of the arrival of the new? Not long, I imagine. Next year I will probably ask whether anyone is seeing any old notes in their change.
3/18/2008 8:53:56 AM (Eastern Daylight Time, UTC-04:00) 
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Monday, March 17, 2008
What's the demand for numismatic art?
Posted by Dave
I owe thanks to the individuals who posted comments with my blog on Friday. It is great to receive helpful information and commentary from readers. Gold at $1,000 an ounce is an important milestone and it is important that people generally be aware of it. One thing where gold at $1,000 an ounce will not be helpful is in the realm of a new Mint project to recreate the ultra-high-relief Saint-Gaudens gold $20 produced in 1907 at the U.S. Mint from dies bearing the famous design of Augustus Saint-Gaudens. The coin proved so difficult to strike at the time that it was quickly abandoned for the high relief versions and mere commerce caused that design to be abandoned because bankers said they would not stack properly. Assuming the Mint succeeds in the production challenges and the fact that the coins will never see commerce, that leaves the problem of projected price. What will it cost the Mint to create the numismatic masterpiece? The base gold value if struck today would be $1,000 plus whatever the markup would be to cover the Mint’s cost and add a little profit. Basic American Eagle proofs are $1,200 from the Mint using a round number. How much more would this special coin be? $1,300, $1,400, or $1,500? In that rarefied pricing area, there are not too many collector buyers, unless of course, they can turn them around and sell them on eBay before the credit card is debited and the coin is shipped. If it can be sold on eBay, great, it is a profit. If it can’t be, it gets shipped back to the Mint within the 30-day return privilege. Back to the basic question: what is the rock bottom collector demand for such a piece? I know that it is more than the 19 ulta-high-reliefs that the Mint press release notes exist from 1907. It is probably in the thousands of pieces, because a first-time issue frequently inspires more buyers than a second. But, using the $1,500 price for easy figuring, a mintage of 10,000 would generate the Mint $15 million in sales. Could it go higher than that? What do you think?
3/17/2008 9:01:31 AM (Eastern Daylight Time, UTC-04:00)
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Friday, March 14, 2008
What's that about $1,000 gold?
Posted by Dave
Various news organizations seem so anxious to reach the nice round number of $1,000 gold that they seem to have prematurely announced it yesterday. The actual close was $992.30 and as far as I can see, trading in spot gold, that is for immediate delivery, did not hit the magical round number. Market psychology is a strange thing. Traders and investors are often attracted to round numbers. There is no practical difference between $1,000 and $997 or $998 unless your gold holdings are of Fort Knox proportions. The milestone will or won’t be reached. My earliest memories of the stock market come from just after the 1966 attempt to reach 1,000 on the Dow Jones Industrial Average. It was close but no cigar and it wasn’t until 1972 before it actually breached the historical barrier. It was 10 years after that before it made a decisive breakthrough upward. Do I see parallels? There are a few. The market enthusiasm seems awfully high. The disappointment at not achieving a breach of the barrier might give some sellers the courage to sell and hesitant buyers enough worry to discourage them. We will see. I write this knowing that I could be completely wrong as soon as formal morning trading begins. But of course, $1,000 gold has already been proclaimed by many news organizations.
3/14/2008 9:01:54 AM (Eastern Daylight Time, UTC-04:00)
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Thursday, March 13, 2008
Steel to make coinage comeback
Posted by Dave
Steel cents are in our future. The only thing is, they won’t look like steel cents. This isn’t as strange as it may sound. We already have zinc cents that don’t look like zinc cents. The steel concept is the same. The core will be coated or bonded to an outer layer of copper so the public will not be able to visually detect the difference. At issue is timing. There are two bills in Congress. At a hearing on Tuesday the divisions became clear. One bill gave discretionary authority over coin composition to the Treasury secretary. The other essentially leaves that power in the hands of Congress unless an extensive round of consulting and public input occurs. Which is Congress likely to go for? My money is on the one where it retains the most power. What they agree on though is the necessity of changing the cent’s composition. That brings us back to steel and timing. It will be around two years before the Mint can line up all of its ducks and suppliers. That seems slow, but that is what the Mint director said. We live in an Internet age where we figure if we can conceive of it, it will be done. The Mint operates industrial plants and things don’t move that quickly. The new composition will save taxpayers money. Any changes to the other denominations depend on which of the two pieces of legislation passes. Let’s watch and see.
3/13/2008 9:01:15 AM (Eastern Daylight Time, UTC-04:00)
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Wednesday, March 12, 2008
Car disrupts morning routine
Posted by Dave
My morning routine was disrupted today. I dashed out the door as usual. I got in the car. I put the key in the ignition – nothing. The mechanism would not unlock. I fooled around with it, jiggling the key and putting it in and taking in out in rapid succession. Still, there was nothing. After trying this several times over the course of a half hour, I called the office. Debbie Bradley came to my rescue and picked me up. That is the advantage of living in a community of 1,300 people. I was not miles away. So here I am, happily at my desk, slightly behind but up and at ’em as the phrase goes. What’s going on in the numismatic world? Well, I haven’t caught up yet. If there is an urgent topic, I will be back again with another posting. If not, I will try again tomorrow to achieve a normal day. Oh. Wish me luck getting my car going.
3/12/2008 9:26:25 AM (Eastern Daylight Time, UTC-04:00)
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Tuesday, March 11, 2008
CoinChat Radio ready to air
Posted by dave
Preparations for CoinChat Radio are in high gear in the office. The first program will be broadcast online at 11 a.m. Friday morning Central Daylight Time. Mark your calendar. It has been great fun putting it all together. I hope you will be listening to it then or when it repeats at the top of each hour. You can access it at www.CoinChatRadio.com. I do an interview with Texas collector Reed Hawn and talk a little bit about a coin he once owned, an 1804 dollar that will hit the market again at auction in April and the Central States convention. Those who are interested in the precious metals markets will have the opportunity to hear my interview of Pat Heller of Liberty Coin Service. Pat shares his thoughts about gold, platinum and silver. The best part, of course, is if you like what you hear, Pat has agreed to come back. It is a deep subject and in a few minutes in an initial interview, I simply wanted to hear more. I hope you do as well. The program has much more packed into it with contributions by Dave Kranz, Debbie Bradley, Lisa Bellavin and Maggie Pahl and Bob Van Ryzin, who also introduces the rest of us. I don’t want to give it all away. So listen in on Friday. If you do, let me know what you think. Point out the good and the bad. Then all of us can give you more of what you find interesting and useful and less of what you don’t like. My e-mail is david.harper@fwpubs.com.
3/11/2008 8:52:14 AM (Eastern Daylight Time, UTC-04:00)
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Monday, March 10, 2008
Back in the office
Posted by dave
Sleep took priority over my blog this morning. I got home about 1:30 this morning, returning from the National Money Show in Phoenix. I was not particularly late. However, at that hour of the morning every extra minute seems to be worth at least two or three. To cover the Krause table until 2 p.m. and then to fly east means a late arrival home no matter what. Had everything gone exactly right, I could not have made it any earlier than 12:30 a.m. So I slept two hours later than usual this morning. What do I think of the goings on in Phoenix? Well, ANA has a new executive direct in Larry Shepherd. Reaction seems very favorable, but it is possible to find one or two dissenters from the majority opinion. The public showed up in force. Many dealers commented on it. Business in general was considered a bit slow. Some blamed the heavy schedule of Las Vegas, Long Beach, Baltimore and then Phoenix on consecutive weekends. Some dealers just didn’t make it to Phoenix as a result. The Tennessee state show kept others away and snowstorms did the rest. Platinum took a header and gold didn’t make it through $1,000, so that prompted a little bit of caution. I did 12 radio interviews for our new CoinChat Radio, which is set to air for the first time on Friday. Perhaps “air” is an archaic term. It is going out online. I hope you get a chance to listen to it. I am sure you will see more about it elsewhere on the Web site. That’s it for now.
3/10/2008 10:49:31 AM (Eastern Daylight Time, UTC-04:00)
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Friday, March 07, 2008
How sweet it is
Posted by dave
Remember Jackie Gleason? Well, his signature phrase popped into my head here in Phoenix. It is good to be with active hobbyists in a very pleasant setting. Winter won’t give up in Wisconsin. Snow is still piled high. Spring is coming. However it doesn’t take seasonal optimism to be pleased with numismatic business conditions. Nobody knows how long the good times will last, but all of the signs keep pointing to continuing high levels of interest and ever rising prices for truly collectible coins. If you know where inflation is going and how hard any recession might bite, you will have an idea of how long the good times can last. Back in 1979-1980, the boom was called “The Party” by dealers. We don’t seem to have a name for this particular period. When we find one, I hope it will last longer.
3/7/2008 3:24:37 PM (Eastern Standard Time, UTC-05:00)
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Thursday, March 06, 2008
On my way to Phoenix
Posted by dave
With silver up nearly a buck yesterday and approaching $21 an ounce in value, it should be interesting to see what the effect might be on bourse activity at the American Numismatic Association National Money Show in Phoenix. As you have probably guessed, I am en route to the show. If the airlines and weather allow, I am due to reach my destination about lunch time. Dealers set up starting at 3 p.m. in the afternoon. In addition to seeing what goes on at the bourse, one of my main purposes will be to cover the ANA board meetings. The good news for me in terms of time spent is that the public meeting lasts just three hours. The bad news is that those three hours are at 3-6 p.m. tomorrow. This will keep me off the bourse floor then. The board has a heavy agenda, including the adoption of the annual budge in public session. In the many private meeting hours, the board was spending all day Wednesday interviewing candidates for the position of executive director. More executive session hours are scheduled for today as well and there will be a town hall meeting Saturday night. Who will want to help straighten out the budget and work to get the ANA out of deficit in future years? That is a key question for the board. This task is daunting enough, but the various lawsuits overhanging the organization make budget projections very difficult if not impossible. The only recourse is massive layoffs or dipping further into the endowment fund. The latter is the likely outcome, and I will be there to watch the public portion of the decision-making process. Any guesses as to just how big the ANA deficit will be?
3/6/2008 9:24:43 AM (Eastern Standard Time, UTC-05:00)
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Wednesday, March 05, 2008
In the blink of an eye
Posted by Dave
I received an e-mail yesterday about the Dolley Madison First Spouse coins. The writer told me that the Madison uncirculated coin was unavailable from the Mint. That is the first word that I had that the Mint had taken the coin down. It was available Monday when I checked. He is right. It was down when he e-mailed me. I had posted a blog Feb. 26 that noted what I thought was somewhat peculiar. The Madison coins were being offered at prices $90 less than the new Monroe coins when they went on sale Feb. 28. I also wrote a story for last week’s print edition of Numismatic News. For at least four days, the two uncirculated First Spouse designs, Madison and Monroe, were offered. The two proofs have been simultaneously offered at different price levels now for six days. I appreciate reader input. I was initially somewhat baffled by the writer’s line: “Contrary to your online info.” Then I checked. I saw that last week’s print version of the story had magically appeared on the Numismatic News Web site dated March 4. That does raise certain issues when markets are moving fast. Stories are true when they are written for the print edition and when they are posted online. Conditions change. Sometimes they change rapidly. Stories and postings pass into history. There they stand. Some just become obsolete quicker than others. This is the record so far. How long the proof Dolley Madison First Spouse coin will remain on sale more cheaply than the Elizabeth Madison remains an active question. If you are thinking about buying, you might want to make your decision quickly.
3/5/2008 8:58:26 AM (Eastern Standard Time, UTC-05:00)
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Tuesday, March 04, 2008
Cent on way out?
Posted by Dave
With the 200th anniversary of the birth of Abraham Lincoln occurring next year and the 100th anniversary mark being attained by the Lincoln cent, there is a lot of talk going on in hobby circles about the lowest current U.S. coin denomination. Its future is rather bleak. Inflation is killing it, aided by changing purchasing habits of Americans. It is far easier to swipe a credit or debit card through the reader and give an electronic signature than it is to count out cash and wait for change. Using cards also eliminates many trips to the bank or ATM to replenish cash walking around money. Since the peak production at the height of the last economic boom in the year 2000, cent production has not ever returned to the approximately 14 billion that were struck in that year. In fact, last year’s production of roughly 7.4 billion cents had actually fallen from the approximately 8.2 billion of the year before. Part of this can be attributed to the slowing economy, but not all of it. In prior cycles, coinage peaks in one cycle were regularly exceeded in the following cycle. Not this time. Americans may be voluntarily abandoning the denomination. Such a death by natural causes is far preferable to political murder. As the Treasury secretary found out Friday when he told a radio program that his personal opinion was he would like to get rid of the cent. The usual howls went up even as he told the same interviewer that it wasn’t politically doable. Why raise the issue at all? Good question. What do you think?
3/4/2008 8:58:36 AM (Eastern Standard Time, UTC-05:00)
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Monday, March 03, 2008
Sounds of silence
Posted by Dave
Silver is trading over $20 an ounce as this is written. Wow. That’s up by more than one-third since the year 2007 ended at $14.797. Gold is not yet at $1,000, but can this milestone be far behind? It began the year at just over $834.90. What’s the Treasury doing about it? Nothing I can see. Should it? That I even ask such a question may be a generational disconnect. It used to be that the Treasury was terribly concerned about the price of precious metals. In the 1960s, the Treasury dumped huge quantities of what had been a 2-billion-ounce hoard of silver to try to maintain its official price of $1.2929. Same with gold. Large amounts went into maintaining the $35-an-ounce figure. The sense of crisis and the public pronouncements all indicated officials considered something amiss. The free market eventually won, but it was treated like a course of castor oil – unpleasant but necessary. Even in 1979-1980, there was a sense of crisis despite the fact that the markets were free. Interest rates were raised to tamp down speculation. One Federal Reserve chairman was pushed out and another, Paul Volcker, was put in his place. Not this time. It’s different. Buyers of gold and silver are starting to sound like buyers of real estate did two years ago. You can’t lose, they say. The similarity is unsettling. That is perhaps why the echoes of the 1960s, 1970s and 1980s are in my ears. They may be part of the past, but are all of their lessons now irrelevant?
3/3/2008 9:03:32 AM (Eastern Standard Time, UTC-05:00)
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