Were you part of the traffic logjam at the U.S. Mint's Web site trying to order the new proof 24-karat American Buffalo one-ounce gold coin June 22? How about the phone traffic back-up on its hired telephone lines?
Somebody was. For the first few hours it was difficult to get through. I had a number of telephone calls and an e-mail or two about the difficulties that occurred. The Mint said it sold 50,000 of the new coins in the first day. Total mintage can be a maximum of 300,000 of the "W" mintmarked collector coins. Four days into the sales period, the total sold had reached 75,000, which is one-quarter of the maximum issue.
Will this beautiful new coin sell out?
No, I am not trying to prejudice your opinion by calling the coin beautiful. It is. It is one of the most distinctly American designs, too. Readers have consistently said as much in their letters to the editor over many years. The opinions, I think, are sincere.
This ongoing hobby love affair with the James Earle Fraser design was tapped to help sell out the 500,000 Buffalo silver dollars in 2001. That feeding frenzy perhaps woke up a few more decision makers to the power of the old design. It was, therefore, put into the authorizing legislation for the new 24-karat gold coin.
I will ask now again. Do you think it will sell out?
I have my opinion, just as I am sure you have yours. Please share yours with me and with other readers. E-mail me at firstname.lastname@example.org. My e-mail and my full contact information appear every week at the box in the lower left corner of this page.
There are a number of factors to consider in a sellout. The first is psychological. What is it that attracts us as collectors into getting into these order tangles? I have never been at the front door of a department store on the day after Thanksgiving to try to be first to a holiday sale, but I did order the Buffalo silver dollar in 2001 before it sold out. The order was not placed the first day, so there was no problem getting through. How about you?
I also don't blast the Mint for these order back-ups. The Mint has a certain capacity. It cannot be expanded to an infinite level in case of an offer of a hot item, so that means waiting times will occur for some potential Mint issues from time to time. Patience and trying again need to be the rule in these cases.
It pays to remember that sales starts can be congested but in the end, the coins simply don't sell out. That was true with the West Point silver dollar commemoratives of 2002. With total mintage between proofs and uncirculateds of over 400,000 coins, it will probably be a drug on the market for years because it does not have the appeal of a Buffalo design.
Knowing this, that means despite the initial sales rush, the American Buffalo gold proof might not sell out.
Another thing to remember is cost to hobbyists. Economists love the term "aggregate demand." That simply means the total of all of us buyers.
What is the aggregate demand for the American Buffalo proof? Well, I know that it took less than $20 million for the hobby to buy every Buffalo dollar in 2001. Doing the math, I know that it will take more than 10 times that to achieve a sellout of the American Buffalo proof gold coin: $240 million. That is almost one-quarter of a billion dollars. Will the hobby go for it? We will see. That's a lot of foregone purchases of other collectible coins.
A large number doesn't mean it won't happen. But it does require a lot of money being put up where our hobby mouths are. Enthusiastic buyers are capable of that, but just how enthusiastic are buyers?
An editor's gut feelings are not infallible. But after adding up facts and experience, I believe this offer will in the end not sell out. If you think I am wrong, let me know. If you happen to agree with me or have additional facts that you think should be considered, let me know that also.
One thing I know; whatever happens, collectors are thinking hard about it.