News stories don’t always end with directions on how to order something. That may seem like a a statement of the obvious. Perhaps not. In our daily lives infomercials tell us that we need to be healthy and fit, and by golly, they just happen to have a new drug or device that will help us reach those happy conditions.

When I write a story about a new coin from the U.S. Mint, I often, but not always, provide the Mint’s contact information. When a club issues a wooden nickel, I will tell readers the price and the order directions. An auction preview story will have contact information for the firm so readers can participate if they choose.

However, there are some stories where  the object is not to sell something, but simply to inform.

I had a couple of phone calls this week from individuals who had read a story in the June 26 Numismatic News about 10 category winners in the Coin of the Year competition. These honors are conferred by World Coin News, a sister publication to Numismatic News, after voting by an international panel of hobby judges.

The coins under review are dated 2005.

The two phone callers wanted to know who they should call to buy the coins that won in the 10 categories.

For the first caller I helpfully suggested that he go online and see who might be offering them. He did not have Internet, so that was out. I told him he could contact coin dealers and see if they had them in stock. Who, he wondered? I invited him to contact advertisers, but that I did not know who might have all of them. The caller sounded disappointed, but that concluded the call.

The second caller was a little more insistent. I offered the same suggestions, but he was not satisfied.

“How do you know about these coins if you can’t tell me where I can buy them? he demanded.

I replied that world mints told me about them.

What? He didn’t understand my use of “world mints,” so I had to explain that the countries that won the honors for the most part have their own mints, which strike coins and collectors buy them at the time of issue. Because the time of issue for 2005 coins is long past, that was not an option.

“Your front page says you are ‘the complete information source for coin collectors.’ Why don’t you know where I can get these?”

He had me there. Why don’t I know where these coins are currently being offered?
Perhaps our advertisers are missing an opportunity.

The three U.S. coins are fairly easy. Our major advertisers carry them. The coin issues of Belarus, Israel, Germany, Australia and Austria are more difficult. They go off into the world dealer community and appear in their online ads, mail price lists and other avenues. The nature of the world field is more dispersed than the U.S. field. Without an online capability, you just might not find what you are looking for without taking some days or weeks to do some tracking.

In the old days, tracking coins was the fun part. In the 21st century, will it remain so?

Gold dropped $9 yesterday and silver fell also.. It got me thinking about the Class of ’63 column from the Jan. 30 issue of Numismatic News. I made 10 predictions for 2007.

These predictions were delivered Jan. 6 to a meeting of the Sarasota Coin Club held in conjunction with the Florida United Numismatists Convention in Orlando.

I am feeling pretty good about the list so far. I nailed the sellout for the First Spouse coins, but I hedged the big one, the possibility that the coin market has topped out and the boom is over. I stated it as a question.

My sense of gold and silver weakness I am also still comfortable with. I don’t like forecasting weakness in precious metals because I know what weakness does to the coin business, but it is what it is. I won’t get a medal for it even if I am absolutely right down to the last decimal point.

Weakness in current gold Buffalo proof coin sales is also what I predicted back in January. Will it finish out at a level I forecast? We have a long way to go yet.

At the end of this blog I will put the full text of my Jan. 30 column so you can see for yourself.

Nothing is absolutely out of the question yet. That’s not bad for six months into the forecast period. What do you think?

What follows is the column text:


I had the privilege of speaking to the Sarasota Coin Club Jan. 6 during the Florida United Numismatists convention in Orlando. This is my second year in a row. That means either they liked what they heard last year enough to invite me back, or I’m just a soft touch.

Perhaps it is my friend, Bart Bartanowicz. He is a member. He made the arrangements. He asked that I offer 10 predictions for the year 2007. I said OK.

Sarasota is a great club. More than 100 members came up to Orlando on a bus that FUN paid for, one of two clubs for which this was done. I appreciated a large audience and their attention and participation.

I hope you find what I told them to be interesting.

My first forecast I put in the form of a question. I said when you have grey hair, you have memories. One of mine is the peak of the market in 1980. I asked whether we would see the end of the current run-up this year. To illustrate, I said the 1913 nickel did not sell in the Jan. 2 auction. While nobody rings a bell when the market peaks, we tend to look backwards and find something to pin it on. In 1980 it was the January peak of gold and silver prices. At the time, we did not recognize it as the end of the boom. However, by the time the Central States convention rolled around in April in Lincoln, Neb., it was obvious the game was up for a while. Poor Lincoln got the reputation as the place the market died and Central States has never been back.

For prediction No. 2, I said that the consolidation of the industry will continue and may even accelerate. This is a phenomenon of prosperity, where the big firms gobble up the smaller ones. It is also an action of a firm that is in trouble. David Hall at his lunch Jan. 5 warned the attendees not to borrow money to hold inventories/collections. If a warning is needed, do we have a problem?

I picked my Jan. 2 column bullion forecasts for No. 3. I said gold would end the year at $600. This looked a little bit daring when I wrote it in December, but a $35 drop in gold at the start of 2007 made it seem almost like yesterday’s news.

Prediction 4 was my silver forecast of $12 by the end of the year.

Forecast No. 5 is a plunge in the number of proof Buffalo gold one-ounce coins in 2007 as compared to 2006. I said sales will run at about one-quarter the rate of sales in 2006 because of the first-year-of-issue demand disappearing. This puts the sales total at 60,000 pieces. If I take the maximum number for 2006 of 300,000, a quarter of that is 75,000 pieces.

Forecast No. 6 is a market feeding frenzy for the First Spouse half-ounce gold coins in May. Their limited mintage to be set by the Treasury will attract the low-mintage, new-issue crowd.

No. 7 is that average collectors are going to have a great year. With book and Internet initiatives set by my company and others in the field, there has never been a better time to be an average collector. There is more information and shared knowledge out there than ever before.

Forecast No. 8 is the likelihood of more lawsuits. Legal actions follow profits. The coin business has been good in recent years and there will be attempts by some to use the legal process to share in the bounty.

My predictions 9 and 10 are tied together. I said this year will see the adoption of new compositions for the U.S. cent and the nickel. I further went out on a limb and said there is a strong likelihood that the new compositions will have steel centers, using a Canadian bonding process. Perhaps the U.S. Mint will not like its suppliers to use licensed technology, but worse, the Mint and its congressional overseers do not like spending more than face value to produce the denominations. Both denominations will continue to be made.

What do you think? Am I off the wall? Am I too cautious? Only time will tell, but I was pleased by the reception given me by the members of the Sarasota club. They are a great group.

I have written many times how important the profit motive is to coin collectors. It may not be the basic reason that a collector collects, but no collectors I know are averse to making a little money.

I should write PROFIT in capital letters when referring to First Spouse coins.

First Spouse gold coin sellers on eBay seem to be attempting to get about double issue price for the Martha Washington and Abigail Adams proof and uncirculated pieces that went on sale June 19 and sold out the same day.

I see “Buy it now” prices of $2,999.95 and $3,200 when the initial cost for a proof and an uncirculated was $1,681.80.

The U.S. Mint is concerned about the perception collectors who were shut out of the sales process might have about what happened. I speculated in my blog last week that a theoretical 4,000 buyers could clean out the entire 40,000 pieces of each design.

In the event, the Mint tells me that there were 25,000 orders received between the two designs and the average sale was roughly three coins per household.

It was conceded that about 8 percent of the orders received were trying to get around the 5-coin per household limit for proofs and for uncirculateds, meaning 10 coins per household total for each design. These will not be honored.

I was told that demand far exceeded the Mint’s most optimistic forecasts and that those forecasts were based on market research.

A consequence of the initial sellout is the Mint says it raises the possibility of an increase in the number of coins offered for the four designs to be sold in 2008. The Mint is ever adjusting sales numbers trying to walk the tightrope between sellouts and having an excess supply at the end of a program. It doesn’t want to melt coins it has already struck.

While profit is important, I have not heard much from collectors who were pursuing the “shocking” idea of actually buying the new coins to hold in their collections. I know they are out there somewhere. I hope I will hear from them.

Legislation has been introduced to give actor/comedian Jerry Lewis a congressional gold medal. I have been a little bit put off by the trend in recent years of Congress giving gold medals to a whole host of people that I had considered ineligible in light of the history of the medal, but perhaps I am too narrow minded.

The medal series started as national recognitions by the Continental Congress for the military leaders whose victories during the Revolutionary War won Americans their liberty from England. George Washington received the first one.

Nowadays the medals seem to be awarded to just about everybody under the sun. But perhaps the wider award of the congressional medals is an accurate reflection of the times in which we live and future generations will look back and consider these awards to be perfectly appropriate.

Ronald Reagan was at first derided as an actor trying to be President. His rejoinder was he did not see how any occupant of the Oval Office could be anything but an actor to do the job properly.

Now we have Law & Order’s Fred Thompson as a leading candidate for the Republican presidential nomination.

If congressional gold medals used to go to generals and Presidents, now that actors – and anybody else for that matter –  can be President, it is perhaps appropriate that Jerry Lewis be given the congressional gold medal.

For chess players and diplomats, the end game is very important. It is important for collectors, too, but too many of them don’t think about it.

Anybody can collect anything. That is the beauty of a hobby where one size doesn’t fit all. Collectors are individualists. They take the road less traveled.

But the road less traveled can be a problem when you’re tired and hungry and need some help, or when it is time to sell your collection of modern errors with a catalog of cute nicknames.

Have you thought about how you will sell what you have been eagerly buying? Will there be an active collector or dealer in 5, 10 or 20 years time when you are looking to cash out to convert some assets to cover the cost of a little home in Florida or a little casa in Baja California for retirement?

I know from experience that there will always be a market for 1909-S VDB Lincoln cents, or 1916 Mercury dimes that are part of mainstream collector sets. Sure, prices will fluctuate, but there are always eager collectors who want them. This is basically true for the coins that grade good to those that top the grading scale. That can’t been said about some coins.

What about currently hot MS-69 and MS-70 state quarters, or Proof-70 Buffalo one-ounce coins? Will the premiums still exist in 10 or 20 years time? There is no way to know for sure. This market could get stronger and stronger, or the coins in those grades might look like the numismatic equivalent of hoola hoops to future collectors.

If you happen to be active in new and specialized areas, it pays to try to sell something every now and again just to test the market and see what the real story is.

That isn’t always easy either physically or psychologically, because accumulation is what collectors do, but it is important for collectors to be knowledgeable about the sell side of the hobby. Without this knowledge, there could be a large problem waiting for them in the future.
 

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?

“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.

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.

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.

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.