By Doug Winter on Tuesday, May 26, 2009
Filed Under: Featured, Market Reports & Prices, Commentary and Opinion

American Eagle shortage ending?
Posted by Dave

Gold buyers for most of the past year have interpreted the shortage of American Eagle gold and silver bullion coins as an indication that the prices of precious metals should rise, even when the exchanges, which trade “paper gold,” were declining.

Now there are indications that the American Eagle shortage is ending.

In the prior two weeks, the 14 purchasers authorized to buy the American Eagle coins from the U.S. Mint have not taken the maximum number of coins that are available, leaving the Mint with an extra 39,000 one-ounce gold American Eagles and 185,000 extra silver American Eagles.

These numbers are not large, but the trend is confirmed by Coin Market editor Harry Miller. He reported in his weekly column on the Coin Market at a Glance pages in Numismatic News yesterday that premiums on these coins have returned to the normal levels that prevailed before the shortages began. Indiana dealer Julian Jarvis three weeks ago was the first to point in this direction in an interview for Coin Chat Radio and Numismatic News.

If this is indeed the end of the shortage, will gold buyers interpret this as an indication that gold bullion prices should stay where they are or fall?

I think you know the answer to that question.

Interestingly, “paper gold” has been rising in price in recent days, now over $950 a troy ounce.

Perhaps gold buyers will find in this market a new best friend and market indicator.

provided by buzz with Dave Harper

Gold Battle Lines Drawn at $1,000 Again

By James West
MidasLetter.com
Monday, May 25, 2009

Here we go again. The forces of legitimate money versus the incumbent purveyors of the candy floss economy squared off at the $1,000 an ounce line over which yet another battle will be fought. Arrayed against either side are formidable new elements and tried and true old ones. As usual, the first volley has been catapulted over the walls of the hucksters by the defenders of the essential timeless truth of gold’s naturally stored value against the counterfeit paper currencies.

The liabilities of the enemy have increased, and the short positions in the COMEX market are sufficiently stacked that the big bank defenders simply cannot allow gold to win decisively. G7 governments are allied against gold to a man, while emerging economic behemoths China and Russia stand in opposition.

In particular, China’s revelations that it has been in a continuous accumulation mode for the last several years and is now the fifth largest sovereign reserve of gold has created an impetus in the gold camp that has been seen lacking in the past. Institutional and sovereign investment entities now perceive a floor in the gold price based on this information, and one must beg the question as to why China would make such a revelation when it threatens to undermine the value of its $2 trillion in U.S. debt holdings.

China has also been careful to avoid buying gold on the international market, for fear, it says, of creating a stampede into the precious metals that would immediately increase the cost of its stated intention to continue accumulating gold towards the backing of the yuan (renmibi) as a global reserve currency.

Yet that is precisely what has happened. Ostensibly, the justification for tipping their hand exists in the fact that they’ve resigned themselves to the fact that selling poison toys and pet foods to Americans in exchange for a currency that loses value like light into a black hole is an acceptable if imperfect transaction. With $50 billion a year in interest payments from the U.S., they can hedge the risk buy using it to buy gold.

With the perceived floor arguably at $850, downside risk is limited in gold far more so than in U.S. treasuries, which, if mainstream media is to be taken as remotely credible, is the current favorite of safe haven investors.

‘Safe Haven’ is about to get painted with same fragrant brush as ‘AAA-rated’ investments.

Goldbugs are salivating at the prospect of vindication, but seasoned veterans of the war know that the governments and central banks arrayed against gold are not fair fighters. Since the largest players in the futures market occupy both sides of the contract, and never take delivery of the physical gold, they can orchestrate a perpetual negative sentiment towards gold by driving the future price downward by simply amping up the short positions, thus making gold appear poised for a sell-off. This has been standard operating procedure for the last decade, and it is interesting to note that ever-bigger short positions are having less influence over shorter durations before the bulls shrug off the flimsy performance and take gold higher.

Critics and observers of this U.S. Dollar image management program point to the fact that such activity, while shoring up demand for U.S. Dollar debt in the short terms, effectively undermines the entire global economy, and is among the fundamental causes of financial crises such as the housing collapse and the whole current global financial fiasco.

Proponents of this manipulation, who are increasingly legion in number, correctly predict an inevitable bursting of the damn catalyzed by investment demand overwhelming the short positions, forcing them to buy and cover to limit losses, which will, in itself, stimulate the gold price even further.

With the limited oversight and feeble reporting standards of the CFTC, the ploy is facilitated by complicit (or ignorant) regulators who ensure data is obfuscated and disclosure limited. It has been this collective effort on the part of the Dollar Defenders that continuously defeats gold’s advances, repeatedly castrating the bulls and sending them whimpering to lick their wounds and regroup.

But China is now leading the charge, and the bet is that they’re willing to forgo the lost value of their USD holdings to decisively undermine the global reserve currency once and for all and replace it with the Yuan, a move that would effectively mark the beginning in the shift of the global balance of power from west to east.

The United States, overextended militarily across the Middle East and Asia, with new fronts threatening to open in Iran and Pakistan, is perilously close to an international nervous breakdown. China’s opportunity is to ride to the rescue bearing smiles and steamed pork buns while dividing up what is left of the American industrial asset pool.

Our leadership of the last decade (or more accurately, absence thereof), eager to lubricate the workings of multinational financial interests, have inadvertently played into the patient hands of their biggest creditor by prostituting the national currency shamelessly to the point where every nation in the world can see what used up piece of spent jet trash the old USD has become.

While mainstream media dismisses the idea of the Yuan replacing the dollar as the international monetary standard, those of us who have tuned out at the perception management program on CNN recognize the event as halfway accomplished.

The truly explosive moment for gold will occur when the Chinese, at their discretion, decide to spring the trap, and abandon USD completely in favor of gold, suddenly spiking the price of gold straight north in tandem with the complete collapse of the U.S. dollar.

Don’t pay any attention to the second rate hacks trying to claim credit for predicting the fall…its been predicted repeatedly throughout history from Nostradamus to Roubini. Any student of economic history with 20/20 vision could see this coming, and here it is. “I told you so” is a waste of time. Who’s offering a solution?

Whether or not this particular battle at the Great Wall of $1,000 an ounce is the mother of all battles remains to be seen. Desperate times call for desperate measures, and while G7 governments collude to retain power, the unforeseeable is the greatest threat to gold.

That being said, veteran observers are optimistic, to say the least.

According to Bill Murphy, intrepid soldier of gold wars and standard bearer for the Gold Anti-trust Action Committee,

 

“The Gold Cartel is giving it all they have no, as evidenced by the sharply rising gold open interest on the Comex … up some 23,000 contracts on Wednesday and Thursday. They are doing all they can to counter new spec buying.My hunch is the next time we see $1,000, and that could be very soon, gold ought to take off from there, giving us more upside dynamic daily moves. The reasons to own physical gold are off the charts … HUGE investment demand, shrinking visible central bank supply (unrelated to the cabal), shrinking mine supply, shrinking dollar, concerns over sovereign wealth debt, a horrible US economy, and a US printing press that is going flat out and will have to for some time to come.

In my opinion, all gold has to do is to stay over $1,000 for a few days, and then all kinds of bells and whistles go off.”

Bill is not the only one who thinks the breakthrough is at hand. Bob Moriarty of 321gold.com, himself a historically prescient oracle of market crashes agrees and warns that the stock market will be the first casualty of the new financial reality.

 

“If you take a look at the dollar and the long bond, it looks as if they jumped off a cliff. This isn’t gold going up, it’s the dollar and bonds going down. When the market wakes up the stock market is going to take a giant dump. No more fake rally.”

Investors by now should be well equipped to read the writing on the wall. Whether gold breaks through $1,000 and holds there, charts new territory at much higher levels, or is beaten back down through the offices of JP Morgan, HSBC and Goldman Sachs, is irrelevant.

Gold producer stocks are up, on average, over 22% this year in the Midas Model Portfolios, while intermediate producers and close-to-production juniors have piled on gains ranging from 20 to 200%, all since January this year.

You won’t hear anybody pointing that fact out on television, and you won’t hear that from your broker, in most cases. But the lesson is clear. Gold bullion is the place to be for wealth preservation, and gold producers and explorers is where risk capital is going to see utterly stupendous gains this year.

If you buy the hype of Wall Street and Washington and wade into the general equities markets, you have nobody to blame but yourself for the heavy losses you will surely sustain.

SOURCE: http://www.midasletter.com/commentary/090525-1_Gold-battle-lines-drawn-at-1000-dollar-an-ounce-again.php

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Printed from: http://www.midasletter.com/commentary/090525-1_Gold-battle-lines-drawn-at-1000-dollar-an-ounce-again.php

May 26 (Bloomberg) — Gold may target a record $1,250 an ounce as a continuation head-and-shoulders pattern may be forming within a longer-term trend, Standard Bank Group Ltd. said, citing trading patterns.

A break and close above $1,050.40 “provides warning that an important breakout” has occurred, Darran Grabham, the bank’s technical analyst, wrote in a note yesterday. A head-and- shoulders pattern is formed when a commodity makes three consecutive peaks, with the middle being the highest. It forms during a series of increases over time.

“The positive implications are substantial, with the minimum objective situated at $1,250,” Grabham wrote. “On the downside, gold weakness through $864 turns the outlook bearish, and the weaker trend could then continue towards $802.”

Gold for immediate delivery traded little changed at $957.29 an ounce at 8:09 a.m. Singapore time. The precious metal is down 7.4 percent from its record high of $1,032.70 on March 17, 2008.

In the near term, a negative bias is expected to dominate in the days ahead as the positive trend has faltered in the $960 to $966.70 area, Grabham wrote.

“A decline into the $940 to $935 zone is anticipated, with $935 regarded as an important support point over the next week or so,” he wrote. “We expect gold to enter a period of consolidation below $966.70, before a break higher occurs, setting up a test on $980.” So-called support levels are where buy orders are clustered.

“If $935 gives way — delaying the next move higher — the sell-off could continue to $925, with $915 representing another key near-term support level,” Grabham added. “Weakness through $915 negates the positive outlook, exposing the market to the $895 to $885 area.”

To contact the reporter on this story: Glenys Sim in Singapore at Gsim4@bloomberg.net

Last Updated: May 25, 2009 20:59 EDT

 Wednesday, May 20, 2009

May 18, 2009 Investing in Cold Fusion and Palladium by Roland Watson
Cold Fusion, that pariah of established science, made a comeback in March as the US Navy’s Space and Naval Warfare Center went public with results which they believed confirmed that low energy nuclear reactions were present, repeatable and decisively demonstrable in their specialized palladium/heavy water experiments. I won’t bother you with the science of their research (more details here) suffice to say that the debate is again polarized on both sides with supporters calling it an important step in the long road to commercial products while the detractors continue to call it bad science. However, the assets leveraged towards this kind of announcement hardly reacted at all in price when the press release was made. One gets the feeling the reaction was “We have seen this before” and they would be right to some extent. Exactly twenty years before, the infamous Pons and Fleischman press conference offered to the world a potential new source of energy which was abundant and free from the waste problems associated with conventional nuclear power. Any bull market in Cold Fusion components was quickly snuffed out though as the scientific establishment turned against the two scientists. And that was that for twenty years. So, will this announcement amount to anything bigger than a hill of radioactive beans? Research institutions across the world that saw some potential in the phenomenon poured millions of dollars since 1989 to no seeming avail. The process was observed successfully in many instances but the scientific mantra of repeatability collided against a volatile and unruly excess heat effect that didn’t quite play to the scientific gallery. Perhaps this time finally the Space and Naval Warfare Center have tamed and caged the Cold Fusion tiger. You can take your side in the debate but if this becomes the real deal will you be positioned to take advantage? As a result of that announcement, I undertook an investigation of the investment potential for Cold Fusion and the best candidates to invest in at this point in time. That is now published in a Cold Fusion Investment Report of which details below. Those familiar with this investment paradigm will probably say three things – palladium, SWC, PAL and that’s all you need to know. In our report we take a look at these three assets (amongst others) and look further afield to where the future of cold fusion investing may lie. We ask some questions such as: Is palladium the only metal that can bring about the Cold Fusion effect? What is the better mining company: SWC or PAL? What about the other palladium mining companies? Why do some forms of palladium not produce Cold Fusion and does that affect some refined palladium products? What is a realistic price projection for palladium if Cold Fusion is commercialized and would such a price make it uneconomical to use? What would be the reaction of governments to such a new and strategic resource? The world of Cold Fusion investing is not black and white as it may appear and the failed attempt of one promising but now defunct Cold Fusion company (see the report) testifies to the fact that one should not jump on the first bandwagon that takes to that road. Take for example the question of government. What has government got to do with this anyway? Well for a start they funded the research mentioned at the top of the article but more importantly any resource that attains strategic importance begins to get more and more State attention. Back in 1933, gold ownership was banned as US government policy morphed into a socialist scenario that saw “public necessity” trump individual wealth preservation. The same held true of silver in 1934 but for larger bullion amounts. If palladium becomes a saviour of alternate energy policy, does government stand back and let the free market take the price of palladium to the stratosphere or will they act to seize all palladium holdings, freeze the various palladium ETFs and license the output of palladium mines in their domain? It is a likely scenario but when and how is as yet unknown. The remit of the investor is to see the telltale signs of government rumblings and exit quickly (for example, Roosevelt banned all silver exports just days before the executive order confiscating large private holdings of silver bars). Another example is the supposed leverage that palladium mining companies offer over the metal. This is a well known strategy amongst precious metals investors but during the palladium bull of 1999-2001, Stillwater Mining Company miserably underperformed palladium. Why was that and how can one decide the mix of bullion and equities as such a future time? Well, you can’t but investors at least need to be aware of the risks involved ahead of time. Cold Fusion is real, but the transformation from a scientific experiment to a commercial product is not there yet. If (or when) it happens and commercial companies begin to pour serious money into finally nailing down the process, I believe palladium will begin a bull market that will dwarf the one that spiked to nearly $1100 per ounce on Russian stockpile problems.

Collecting CC Morgans

By Mike Thorne, Coins Magazine May 18, 2009

I think it’s fair to say that the Morgan dollar, minted from 1878-1904 and then again in 1921, is one of the most widely collected of all U.S. coins. Of course, for most young people who began collecting coins when I did (in the 1950s), silver dollars were available at banks but too expensive to collect. After all, you could retrieve 100 scarce Lincoln cents from circulation for what it would cost you to set aside one silver dollar.

But at some point, a young collector becomes an older collector, and his or her finances improve to the point where collecting silver dollars doesn’t seem too much of a stretch. And there are so many Morgans to accumulate that that’s often the first dollar that calls to the collecting instinct.

If you think about it, there are many different ways to collect Morgan dollars. You can do it the old-fashioned, obvious way: try to obtain one of each date and mintmark combination. Of course, that turns out to be somewhat problematic, as there are some quite scarce (and pricey) coins along the way to set completion.

A simpler approach that would be far less expensive would be to put together a date set consisting of the least expensive example of each of the different years Morgans were minted. That is, you would have a complete year set without the focus on all the different mintmarks.

Another way to collect Morgans is by variety. If you decide to go this route, you’ll soon find that the Morgan dollar has been extensively studied, and there are varieties galore for your collecting pleasure. Even A Guide Book of United States Coins, which is not known for having extensive, comprehensive descriptions of varieties, lists five different varieties of the Philadelphia-minted 1878 and another five varieties of the 1880-CC.

If you happened to be a collector living in the Deep South, and particularly in Louisiana, then you might choose to assemble a set of all the Morgans minted at the New Orleans Mint. Although New Orleans generally cranked out Morgans by the millions, there are a few scarce dates (1893-O, 1895-O) that are expensive in all grades.

Also, because New Orleans turned out so many of most dates, the results often were of rather indifferent quality. Because of this, some of the most expensive Morgans in higher grades bear the “O” mintmark. For example, the 1886-O, with an original mintage of more than 10.7 million, is valued at $220,000 in Mint State-65 in the 2009 U.S. Coin Digest. This is a coin that’s worth only $23 in Extremely Fine-40.

Yet another way to collect Morgans, which you’ve probably surmised from the title of this article, is to focus on Morgan dollars from the storied Carson City Mint. In its simplest form, such a collection consists of just 13 different coins: 1878-CC through 1885-CC and 1889-CC through 1893-CC.

Putting together a set of each of the CC Morgans is definitely a good news/bad news story. It’s good in the sense that there are not that many coins to get, and most of them are relatively plentiful in uncirculated. Unfortunately, the bad news is pretty bad: Four of the dates (1879-CC, 1889-CC, 1892-CC, 1893-CC) are fairly pricey in all grades. Also, even the “common” dates are relatively expensive because of demand.

Given its proximity to the San Francisco Mint, you may wonder why a mint was even needed in Carson City, Nev. The simple answer is that it was needed because of a major discovery of silver in Nevada, and the trip to San Francisco to have it minted into coins was both arduous and extremely dangerous.

The story of the Carson City Mint begins in 1859, when two prospectors, Patrick McLaughlin and Peter O’Reilly, discovered a huge silver deposit on land that belonged to Henry Comstock. Even though Comstock sold his claim to the land, his name remained with the silver deposit, which became known as the Comstock Lode.

To properly develop the Lode, the people of Nevada decided that they needed a branch mint, which was authorized by Congress in 1863. Unfortunately, this was during the height of the Civil War, so actual construction of the mint had to wait.

Ground-breaking for the mint took place in July, 1866, in the town of Carson, named by its founder after Kit Carson. Carson’s founder was Abraham Curry, who not coincidentally became the first superintendent of what came to be known as the Carson City Mint. The new mint opened for business at the end of 1869, and the first coins struck there were 1870-CC Seated Liberty dollars.

From the outset, the San Francisco Mint tended to be favored over the one at Carson City, with the result that typically many more coins were stuck with an “S” mintmark than with a “CC” mintmark. In A Guide Book of Morgan Silver Dollars, David Bowers expresses it this way:

“By 1878, Curry was long gone as superintendent of the Carson City Mint, and James Crawford was in his place. However, San Francisco still tended to be favored, as evidenced by production that year: of the 1878-CC dollars, 2,212,000 were struck, compared to 9,994,000 of the 1878-S. In the next year, 1879, there were 756,000 1879-CC dollars made as opposed to a flood of 9,110,000 1879-S dollars.”

Bowers expresses collector enthusiasm for CC Morgans as follows: “Today, Carson City Morgan dollars occupy a special affection, a special place in the hearts of collectors. Although the 1879-CC is rare in comparison to demand, and the 1889-CC is even more so, the majority of Morgan silver dollars from 1878 to 1885, and again from 1889 to 1893, can be acquired in Mint State for reasonable cost.”

Of course, what’s reasonable for one collector may be prohibitive for another. Let’s take an individual look at the 13 CC Morgans.

The first thing you notice, if you list all the different dates and their mintages, is that mintage is a poor indicator of a particular date’s value. One reason for this lack of correlation between mintage and value can be summarized by three letters: GSA. That is, in some cases nearly the entire mintage of a particular date was found to have been retained by the Treasury, and these coins were later dispersed in a series of sales by the General Services Administration. Hence, some of the dates are much more plentiful in high grades than their mintages would suggest. That doesn’t make them cheap, however.

With a mintage of 2,212,000, as I indicated earlier, the 1878-CC has the second highest mintage of the 13 dates, following only the 1890-CC (2,309,041). Although the 1878-CC exists in circulated grades, there seems little reason for the collector to settle for one that’s not in mint state, as there’s relatively little price differential between an 1878-CC in Very Good-8 and one in MS-60.

Bowers considers the optimal collecting grade to be MS-64, which lists in the 2009 U.S. Coin Digest for $625. Personally, I would probably settle for the date in MS-63 at $390. One reason for the large number of these in mint state is that more than 60,000 were sold in the GSA sales. Although that sounds like a lot, as you will see, it’s minuscule compared to the number sold of some of the other dates.

With a mintage of 756,000, the 1879-CC has the sixth-lowest mintage of the 13 CC Morgans. That should put it about in the middle of the pack in terms of value, but remember, mintages for this series can be quite deceiving.

In fact, the 1879-CC is the key date in the first group of CC Morgans (1878-CC through 1885-CC). Just 4,123 were available in the GSA sales, and Bowers suggests, “There were probably hundreds of thousands of 1879-CC dollars melted under the 1918 Pittman Act.&” As a result, he estimates a population of no more than about 5,000 uncirculated pieces.

There are two major varieties of the 1879-CC: One has a large CC and the other has a large CC over a smaller CC, which is sometimes called the “capped die” variety. Although the overmintmark is the scarcer of the two varieties, the “perfect” mintmark is more popular and thus slightly more expensive in most grades.

In circulated grades, the 1879-CC is relatively reasonable, but prices of mint-state pieces ascend rapidly. The date starts at $165 in VG-8, goes to $185 in Fine-12 (which definitely seems a better buy than a VG-8), jumps to $285 in Very Fine-20, and then starts a more rapid ascent: EF-40 $735, About Uncirculated-50 $1,900, MS-60 $4,150, MS-63 $7,500, MS-65 $27,850, and in MS-65 deep mirror prooflike $48,750. These prices are for the large CC variety. In MS-64, Bowers’ Optimal Collecting Grade, the 1879-CC is a $10,250 coin. Even with all the money I make writing for coin magazines, I’ll have to stick with circulated varieties.

With just 591,000 minted, the 1880-CC has the fourth-lowest mintage of the CC Morgans. However, this is another case in which the mintage is quite deceiving. According to Dave Bowers, writing in Silver Dollars & Trade Dollars of the United States, more than 130,000 were sold in the GSA sales, with “perhaps 100,000 or more distributed earlier.” This gives an estimate of 230,000, which is nearly half of the total Bowers estimates remained after melting.

As for die varieties, there are two major types: Reverse of 1878 (flat breast) and Reverse of 1879, which is more plentiful but similarly priced. In addition, “most if not all 1880-CC obverses were overdated” (80/79 or some variation thereof).

Values vary somewhat for the different varieties but not as much as you would expect. Also, with so many uncirculated pieces available, it would seem reasonable to me to purchase a mint-state specimen if you wanted to add this date to your collection. Values for the 1880-CC reverse of 1878 range from $175 in VG-8 to $2,775 in MS-65. The coin lists for $600 in MS-63 and $1.265 in Bowers’ Optimal Collecting Grade of MS-64. As you can probably guess, I would (and did) buy the date in MS-63.

The 1881-CC has the second-lowest mintage, with just 296,000 struck. Again, this is deceiving in terms of the date’s value, as the GSA sold 147,485 of this date, which is nearly 50 percent of the total minted. Thus, there are lots of uncirculated 1881-CCs for collectors to buy. Because of the availability of this date in mint state, the range of values for it is quite restricted in all grades below MS-65 DMPL. Also, because the difference in price between VG-8 and MS-60 is less than $200 ($375 and $555, respectively), it makes little sense to me to consider buying a circulated specimen.

For the 1881-CC, Bowers chooses MS-65 ($975) as the Optimal Collecting Grade. Naturally, the one I have is in MS-64 ($625). Fortunately, I bought it in one of the GSA sales for $45 or so, as it was in the “faulty” group, which I had read at the time was the category containing the best bargains. These were coins that GSA had decided were defective in some way. For the most part, they were toned coins, and in many cases they were worth considerably more than the coins in the “regular” category. As most of the dates were 1882-CC, 1883-CC, and 1884-CC, getting an 1881-CC was a stroke of luck and very exciting at the time, as you can imagine.

We can lump together the 1882-CC, 1883-CC, and 1884-CC, as they had similar mintages of slightly more than a million pieces each, which give them the ranks of seventh, ninth, and eighth, respectively, of the 13 dates. They are also valued similarly and, along with the 1878-CC, are the least expensive of the CC Morgans. As Bowers puts it, “The 1882-CC and the two successive Carson City issues&constitute the most widely available Carson City silver dollars. In 1964 the Treasury Department held back vast quantities of these issues, later distributing them to collectors and others [in the GSA sales].” In fact, the GSA sales distributed 53.4 percent of the 1882-CC, 62.8 percent of the 1883-CC, and a whopping 84.7 percent of the 1884-CC.

Because all of these GSA coins were in mint state, there’s little reason to purchase any of the three dates in a circulated grade, or, for that matter, in any grade less than MS-63. As just one example of the restricted range of values you’ll find for these dates, the range in values for the 1884-CC between VG-8 and MS-63 is exactly $100! In MS-63, all three dates sell for around $200 apiece.

I obtained one or more of each of these dates in my GSA purchases, but, for some inexplicable reason, sold all but one 1883-CC. Thus, when I later decided to assemble a set of the CC Morgans, I was forced to buy the 1882-CC and the 1884-CC, which, as you would expect, had risen dramatically in value since I sold the GSA examples.

The 1883-CC that I kept turned out to be one of my all-time greatest bargains. When I sent it to Numismatic Guaranty Corp., which certifies GSA coins in their original holders, it came back MS-66 Prooflike. It’s hard to find a value for a coin in this grade, but I’ve seen them advertised for close to $1,000. Not bad for $45.

The 1885-CC is another of the low-mintage pieces (228,000, which gives it the lowest mintage of the lot) that is not worth nearly as much as you might think. Credit for this situation goes again to the GSA, which dispersed slightly more than 65 percent of the original mintage at the GSA sales. Again, there’s little reason to purchase a circulated specimen, as the difference in value between the date in VG-8 and MS-64(!) is less than $200. Not surprisingly, Bowers’ Optimal Collecting Grade is MS-65, which is valued at more than twice as much as the date in MS-64 ($1,450 vs. $720, respectively). Care to guess which grade I bought?

We’ve finally gotten to the big kahuna, the 1889-CC. In A Guide Book of Morgan Dollars, Bowers writes: “The 1889-CC dollar is one of the great keys in the Morgan series, and among Carson City issues it is far and away the most elusive. In comparison to the demand for them, examples are rare in all grades.”

Its mintage of 350,000 gives it the third-lowest mintage of the 13 dates. However, unlike the last five dates I’ve discussed, the 1889-CC was not part of the GSA sales. In his Guide Book, Bowers writes, “Of the 350,000 1889-CC dollars made, many thousands were paid out in the 19th century, yielding a supply of circulated pieces for numismatists today.” In Silver Dollars & Trade Dollars, he estimates that at least 250,000 of the date were melted and that there are no more than about 12,000 in all mint-state grades combined. From this, you can see that the vast majority of the remaining specimens are in various circulated grades.

Pricewise, the 1889-CC begins at $675 in VG-8, and this is a coin that I can fairly confidently predict will top the $1,000 mark in the not-too-distant future. It’s $1,050 in F-12, $1,750 in VF-20, $3,650 in EF-40, $7,250 in AU-50, and $22,500 in MS-60. Obviously, there’s a huge jump from the circulated category to uncirculated. In MS-65, the 1889-CC lists for $290,000.

At the end of his discussion of the date in Silver Dollars & Trade Dollars, Bowers writes, “Numerous ’1889-CC’ dollars have been created by adding mintmarks to common 1889 Philadelphia Mint coins. Unless you are an expert and can do it yourself, have any high-value 1889-CC dollar authenticated.” To this, I would add, “Amen.”

Bowers’ Optimal Collecting Grade for this date is MS-63, which lists for a mere $43,500. I would have to win a sweepstakes in order to be able to afford an uncirculated 1889-CC, so I’ll just have to be satisfied with a circulated specimen. Don’t tell my wife, but I recently added such a coin to my collection. Graded F-15 by PCGS, I bought it at auction for a shade under $1,000. The next two CC Morgans, 1890-CC and 1891-CC, had relatively large mintages, ranking 13th and 11th, respectively. Neither date was well represented in the GSA sales, with just 3,949 1890-CCs and 5,687 1891-CCs among the coins sold.

Summing the low estimates, Bowers thinks there are approximately 34,000 uncirculated 1890-CCs remaining and approximately twice as many 1891-CCs. Given the large number of mint-state specimens, it would seem reasonable to look for one in uncirculated rather than settling for a circulated coin.

For both dates, Bowers considers MS-64 the Optimal Collecting Grade. Values in this grade are $2,650 and $1,450, respectively. As both dates list for less than $1,000 in MS-63 ($950 and $800, respectively), you can imagine which grade I would try to add to my collection. Actually, I bought a nice NGC-graded MS-62 1891-CC for slightly more than half the MS-63 price. I’m still looking for an appropriately priced 1890-CC.

Both dates have interesting varieties that are worth slightly more than the normal versions. For the 1890-CC, Bowers’ Guide Book listed variety is called the 1890-CC Tail Bar because of a bar extending “from the bottom arrow feather to the olive branch below.&”

The well-known die variety of the 1891-CC is the so-called Spitting Eagle variety, the “saliva” created by “a tiny gouge or chip out of die in space between upper and lower beak points&,” according to Bowers’ encyclopedia. In the Guide Book, Bowers notes, “Any promoter wanting to sell one of these for a stretchy price had better hide a copy of The Top 100 Morgan Dollar Varieties from potential customers [because it says the variety] is not only ‘not rare,’ but is actually the most common of all the 1891-CC varieties!” Values listed for the variety in Coin Digest are slightly higher in all grades.

Like the 1889-CC and the 1893-CC, the 1892-CC Morgan was not part of the GSA sales, so its value in all mint-state grades is much higher than you would expect for a coin with its mintage (1,352,000), which is the tenth highest in the series.

Taking the low estimates, Bowers suggests that there are about 32,000 survivors in uncirculated, so if you can afford the price, obtaining one should not be difficult. Again, his Optimal Collecting Grade is MS-64, which lists for $3,750 in Coin Digest.

With the 1892-CC listing for $1,650 in MS-60 and $2,450 in MS-63, for now I’m going to be satisfied with one in circulated condition. Last year, I bought a Professional Coin Grading Service-graded EF-40 for about $440, which is less than its Coin Digest value of $535. It’s an $800 coin in AU-50.

The last date in the 13-coin set, the 1893-CC, is another of the big-ticket CC Morgans, at least in grades of EF and above. Part of the reason for this is its mintage, which was 677,000 pieces, and another part is that it was not included in the GSA sales, as I indicated above. Using his low estimates again, Bowers suggests a survival of approximately 18,000 uncirculated pieces.

This time, Bowers’ Optimal Collecting Grade is MS-63, and the reason for this is obvious when you look at the MS-64 value ($14,000). Unfortunately, the MS-63 value of $6,800 is beyond my collecting budget as well. Actually, the 1893-CC doesn’t get into my range until the grade of VF-20, which lists for $725. In fact, I bought an ANACS-graded VF-20 at auction for about $475 earlier this year.

The 1893-CC starts at $265 in VG-8, is $345 in F-12, lists for $1,850 in EF-40, $2,350 in AU-50, and hits $3,700 in MS-60. If you’ve got the money, the MS-65 value is $56,000. In Guide Book, Bowers writes that uncirculated 1893-CCs are typically quite baggy. He also says, “Many attractive circulated coins exist and for many buyers will neatly fill the 1893-CC space.” Perhaps I’ll trade up to an EF-40 some day, although the better part of $2,000 seems a lot to pay for a coin that’s so far below uncirculated.

As you can see from this discussion, none of the 13 CC Morgans is really all that rare, at least in lower grades. Some are quite rare, however, and priced accordingly, in higher mint-state grades.

At least three of the dates (1882-CC through 1884-CC) are actually fairly common in mint state, which leads to the question: Why are they priced so high (around $200 apiece in MS-63)? The answer can be summed up in one word: demand.

At the time of the GSA sales, many predicted that the price of CC dollars, particularly the ones heavily represented in the sales, would drop once the coins hit the market. In fact, just the opposite occurred, and the reason is fairly obvious: Dates that had once been considered rare now became plentiful enough that most collectors could afford them.

Think of the 1884-CC as an example. In terms of the numbers of coins available to collectors, this was a relatively rare date until the GSA sales dispersed nearly 85 percent of the original mintage. Collectors that previously had considered the CC Morgans impossible to find now begin to think of most of them as readily obtainable. This, of course, increased demand for the dates across the board, and prices rose even as quantities soared in some cases.

If you like Morgan dollars, and most collectors do, then the compact, 13-date set of Carson City Morgans has much to recommend it. From my experience, I would encourage you to get started collecting them sooner rather than later if you want to be able to afford one of each date. Also, try to get the key dates (1879-CC, 1889-CC, 1892-CC, 1893-CC) as quickly as you can, as I can fairly confidently predict that these will rise in value at a greater pace than their more common brethren. As always, happy collecting.

Provided by numismaster.com

Gold Buys Freedom

By Patrick A. Heller, Market Update May 19, 2009

There are dozens of financial reasons why it makes sense to own gold (and silver) as insurance against the risk of declining values of paper assets such as stocks and bonds and currencies (especially the U.S. dollar). Many of my weekly essays are devoted to the financial aspects of owning precious metals.

This week, I would like to address what I consider the number one political reason to own gold – individual freedom. Although I have considered the political aspects of gold ownership ever since I bought my first gold coins in 1973, it wasn’t until last week that I came across a superb articulation of this concept.

Dr. Arthur B. Robinson is president and a research professor at the Oregon Institute of Science and Medicine. Years ago, he took over publication of Access To Energy (ATE), a pro-science, pro-technology, pro-free enterprise monthly newsletter. Since energy availability is affected as often by political actions as technological issues, ATE regularly covers politics and economics. The recently released August 2008 issue of ATE contains an essay titled “Printing Capital.” With Dr. Robinson’s permission, here are some cogent sections related to gold:

“Most capital is stored in kind as factories, power plants, roads, buildings and other useful products of human effort. It can also be temporarily stored in smaller quantities as money – the medium of exchange … Money is, however, not capital.

“All sorts of things have been used as money. Thousands of years of experimentation has determined, however, that the best money is silver and gold, especially gold. Gold is convenient in many ways. One important way is that it cannot be counterfeited and is costly to obtain from nature. This difficulty keeps the supply of gold approximately constant so that prices remain stable.

“The rise of the United States as a free, prosperous industrial civilization was greatly facilitated by the use of gold as money … In addition, the great industrial productivity of the American people – a greatness that resulted from our freedom, not from our genetics – and the stability of our gold-backed currency made the U.S. dollar the world reserve currency. Throughout the world, people trusted the U.S. dollar as money.

“Then – the counterfeiting began. The U.S. government … printed new money as a way of funding its activities. As the supply of money rose, prices rose concomitantly.

“Printing money can be used, however, as more than a mechanism of hidden taxation. It can be used as a weapon against freedom.

“Gold money has been correctly called ‘coined freedom.’ Even today when few Americans are old enough to remember the use of gold coins as money in the United States, the U.S. government realizes that gold provides a measure of its economic dishonesty  and works through surrogates to minimize the rising price of gold. It also taxes gold in such a way that gold cannot serve as a store of value … because the gold itself is gradually confiscated through taxation by claiming that its price rise is ‘income’ or ‘capital gains.’

To obtain the entire August 2008 issue of Access To Energy or for subscription information, go to their Web site at www.accesstoenergy.com.

I have concrete examples relayed to me personally how gold buys freedom.
I have met a number of Southeast Asian refugees over the years, including many who have come to my coin shop to buy gold. In almost every instance, these refugees were able to escape with their lives because they owned gold to buy their way out. The general public would be surprised how many of these refugees still want to own gold even though they might consider the United States a “safe haven.”

A few years ago, I bought the surviving pieces of a hoard stored in a Dutch cookie jar. When the Germans overran The Netherlands in 1940, the gold coins were used to pay for the escape to the Western Hemisphere of many of this Jewish family’s members.

So, buy gold (and silver) for all the right financial reasons. But keep in mind that some physical gold in your possession may someday save your life and freedom.

Provided by numismaster.com

What ceremony? Give us the coins
Posted by Dave

Some 3,000 to 4,000 people made their way to the Lincoln Amphitheatre in Lincoln City, Ind., yesterday for the ceremony officially introducing the second 2009 Lincoln cent design.

They mostly ignored the actual ceremony. My contact, Don Mark, a hobbyist from Johnston, Iowa, who drove over with Mark Olson estimated the capacity of the theatre at 1,500 and of that only about 10 percent was used.

Why?

He said that people going to the ceremony would lose their place in line to get the rolls of the new coins for face value.

So Mint Director Ed Moy and other dignitaries basically talked to an empty house.

The six-roll per person restriction was in effect all day, unlike the event at Kentucky in February when at the end remaining boxes of the cents were available to anyone who wanted them.

However, participants could go through the line more than once – and they did.

Don and his fellow collector went through the line three times, each gaining 18 rolls for their effort.

The first time, he said, it took 30-45 minutes to get to the head of the line to get coins, but he pointed out that he arrived on site at 8 a.m. for a 10 a.m. ceremony and coins weren’t distributed until after the ceremony’s conclusion.

For the second time, Don said the line was 1,500-2,000 people long and it took an hour and a half to reach the coin distribution point.

The third time, he estimated, the time required was almost as long, at one and a quarter to perhaps one and a half hours.

Don said he witnessed the wheeling out of the last five boxes of cents from the Brink’s truck, so he said all the available supply was distributed.

Don also said he talked to someone who had been at the Feb. 12 Kentucky ceremony and was told that the crowd in Indiana was about four times the size of the Kentucky crowd.

An interesting tidbit was that leaflets were distributed telling people that it was illegal to buy and sell in the park.

If everybody rushed home to offer the coins on eBay, the odds are that the wider distribution will help hold prices below those that prevailed for the first design.

However, if the bulk of the people were there solely to acquire coins for their collections, that would be another matter. The greater publicity might also help push prices higher as individuals who missed the first issue try to catch up with the second.

provided by Buzz with Dave Harper

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