Thursday, December 30, 2010

US Mint 2011 Product Schedule

5 Ounce ATB Silver Bullion Finally Reaches Public

By Debbie Bradley, Numismatic NEws December 29, 2010

This article was originally printed in Numismatic News.
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America the Beautiful 5-ounce silver bullion coins are getting into the hands of the public, just as silver heads past $30 an ounce.

Already they’re showing up on the secondary market, where prices for the five-coin set hovered around $2,800 on eBay in late December.

A collector from Waverly, Iowa, received a set from American Precious Metals Exchange ATB Jump on Dec. 24.

“I was one of the lucky ones that put in my order within the first few hours of their going on sale online on Dec. 3,” he wrote to Numismatic News.

2011 U.S. Coin Digest: Bullion Coinage Your best reference for the latest details and values for these circulating and non-circulating bullions. Get your download today!

Although he had ordered three sets, sales rules subsequently imposed by the U.S. Mint capped orders at one per household.

“The coins are both larger and thicker than I had imagined they would be and are quite hefty,” the Iowa collector reported.

The APMEX website on Dec. 28 listed the coins as out of stock, while the Dillon Gage website said the coins would be available for sale Jan. 3. Each company is one of nine purchasers authorized by the U.S. Mint to sell the coins, which were limited to a mintage of 33,000 sets.

APMEX CEO Michael Haynes said the company put a temporary stop to sales until questions it put to the Mint about the new rules could be answered and analyzed.

“We are hopeful that within the next days, maybe a week, we would be able to fully understand the rules so we could be able to offer the coins and comply,” Haynes said on Dec. 28.

The Iowa collector said the 5-ounce coin designs are beautiful in full format.

“Even the Hot Springs issue, which I had found to be quite ugly in regular quarter size,” he said. “It displays extreme detail and it is quite obvious that the wall in the background is actually a wall.

“A second bonus is that the Mount Hood coin came with proof-like surfaces. In my opinion, this is the most beautiful of these five coins.”

The set is already on its way to a grading service for “Early Releases” designation, the collector reported.

“My intention is to build the entire set, but time will tell,” he said.

Tom Miller, manager at Jack H. Beymer in Santa Rosa, Calif., said there have been some calls from customers seeking the coin sets, but the company doesn’t have any in stock.

“We’re waiting for when they’re offered over the counter,” he said.

At a purchase limit of one per household, that may be all a dealer can do.

“We do want to sell it,” Haynes said. “We’re not in the collecting business, although all of us like it, our business is selling.”

So what is the chance of being able to buy a set of the 5-ounce coins?

“I don’t know what anyone’s chances are,” Haynes said. “It’s almost like a lottery.”

Collectible Coins Retain Value: Survey

By David L. Ganz, Numismatic News December 29, 2010

This article was originally printed in Numismatic News.
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Even as Congress and the President settle on tax cuts that are designed to rebound to the national economic benefit, some simualtaneous surveys performed nationally with data bases that are well-known suggest that the recession is still having a serious impact on prices of rare coins, regardless of their condition.

On Dec. 18, 2010, President Barack Obama inked his name to a tax cut that will provide relief to many Americans and simultaneously offer unemployment insurance payments for up to 99 weeks in what is the worst period of joblessness since 1938. There will be a reduction in Social Security payments and other taxes that will have a net effect of 2 percent on most paychecks.

In the midst of all this, Professor Michael Duffy of the University of Iowa Extension System announced Dec. 15, 2010, the annual price that land is going for these days in Iowa. The number is a point of comparison in many economic analyses and was also a key number for many years in the Salomon Brothers examination of the rare coin industry.

For the record, farmland in Iowa jumped over $690 an acre (on average) in 2010 to $3,500 an acre, a new record price. In 2001, it was valued at $1,926 an acre.

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For the purist who wants to know the rate of return from 2001 to 2010 it is an 11.3 percent compounded rate of return – not bad for something that is not transient and easily transported. I guessed originally a 5 percent increase in farmland values over last year. Duffy set me straight.

“The bankers estimated that our values went up 7 percent in just the first quarter,” Duffy said. “I would think that we are probably about 10 percent up from the November estimate.That would mean about $3,500. It could even be higher.

“Things have slowed down a bit but there is still a lot of strength in the market.”

Three-quarters of a century ago, in 1935, the correlated price of Iowa land was $71 an acre. The compounded rate over 75 years is an impressive (but respectable) 5.8 percent compounded daily over the period of time.

How does that compare with, say, gold?

In 1935, gold was $35 an ounce (having been recently raised by devaluing the dollar from the prior rate of $20.67 an ounce. On Dec. 15, 2010, gold’s price was $1,376 per troy ounce or about 40 times the price during FDR’s administration. The rate of return is 5.01 percent compounded daily. Also impressive for something that is so portable.

And what about that other precious metal that is more common and not serious, much of the time, in its price as an investment vehicle – silver?

Well, in 1935, silver was 58 cents an ounce. On Dec. 15, 2010, it was $29.16, or about 50 times the price during the Roosevelt administration.

If you use 2002 as a base line ($5 an ounce silver), today’s $29.16 silver means an annual rate of return of 28 percent. The precious metal rate of return isn’t bad at all.

There’s another precious metal to check out in all this: platinum, a much newer number on the periodic table that has a group of metals that follow it in every respect, including price. Although Congress once tried to hammer the Soviet Union over gold and platinum issues, today it is strictly mercenary.

Platinum today has a price of $1,693 an ounce and a market peak of about $2,000 during calendar year 2008.

My charting that accompanies figures the Dow for what it was on Dec. 15, 2010, at 13,649.

I retroactively changed farmland to cover only that in Iowa because the data seems more current, is reliable, and accessible. U.S. government statistics are sporadic and finalized numbers are still 2 to 3 years old.

For many years, I have both published and analyzed the Salomon Brothers coin survey, which made a public appearance in 1978 in the Federal Reserve Bank of Boston quarterly journal.

Salomon Brothers measured tangible assets such as coins, later stamps, old master paintings, foreign exchange, farmland, precious metals (gold and silver, but not platinum) and saw where it all went.

Just whose laundry turned out to be dirty was the surprise each year, and how the coin market did compared to all of them was what attracted the numismatic industry to their method of measurement, and result.

The list was disclosed in the Neil S. Berman and Hans M.F. Schulman book on coin investing that the Coin & Currency Institute (Art Friedberg) published in 1986.

Stack’s, of course, did the pricing on this. They always claimed that the choices were generic so that, for example, an 1873 proof 2-cent piece could be a proof tupper of another date.

A total of 20 different individual coin types were included in the Salomon Brothers examination, none of them gold, most of them subsidiary coinage (dimes, quarters and half dollars), some of them minor coinage (half cent through 3-cent nickel), and a couple of silver dollars and commemoratives.

Each is broadly representative of a class of coins, or a type that is widely collected and hence easy to value, even if the individual coin date and condition is not easily replicated. For example, an 1876 20-cent piece in uncirculated condition is approximately the same as a an 1875 20 cent piece and even an 1875-S.

A 1795 Draped Bust dollar is similar to the 1796 or even the 1797 or 1798 silver dollar.

Mintages and scarcity vary, but overall trends can be followed with reasonable adjustments.

Tracking the coins on a computerized spreadsheet has been done by me for many years. Besides the coins, statistics include a total amount (aggregate) for the coin portfolio and its annual average plus rate of change from year to year; the average price of gold and silver; the CPI and its rate of change; gold’s rate of change; the Dow Jones Industrial average and its rate of change and the price of platinum.

All of them go back to 1938 (except or Platinum which I initially tracked back to 1978). I recently found good data (government mining sources) that allowed me to value it for charting purposes back to the late 1930s.

I took the time to count, and what all of this means that the current spread sheet has over 3,700 data entry points that analyze a variety of markets.

There are no secrets about this; when you chart gold, there’s not a lot of movement between 1934 and 1968 – a $35 an ounce rate was enforced by the government’s purchase and sale program and by a prohibition against domestic private gold ownership. The charts are more interesting when looked at over the last 25 or so years when gold or platinum are involved.

Regardless, my index points utilize the same coins that Salomon Brothers did. My pricing source is Dennis Baker’s NumisMedia, which has supplied me with working data for many years.

Here’s an actual example of pricing for a particular coin, the 1794 half cent in XF-40 condition, which shows that rare coins go up, down and sideways – that is, sometimes they don’t change from year to year at all.

Even with no change, the overall picture over a 68-year period shows an average annual return of 10.65 percent since 1935 – not bad for a circulated coin with a mintage of over 81,000 pieces.

Tuesday, December 28, 2010

2010 Proof Silver Eagle Sold Out

Useless Money: Production “Error” to Cause Delay in New $100 Bill Debut

 

Monday, December 27, 2010

2011 Annual Sets Release Dates

Golden Begining: 1795 Marked First U.S. Gold Coins

By R. W. Julian, Coins Magazine December 21, 2010

This article was originally printed in Coins Magazine.
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Prior to the American Revolution there was not all that much coined money in what is now the United States. There was some silver, mostly Spanish from mints such as Mexico City, but virtually no gold. What little gold did arrive in the Colonies came from the ships trading with the Spanish provinces in the Americas.

The gold that did come to our shores usually left nearly as quickly. Merchants advertised in the newspapers to buy gold coins, usually with silver, and the coins thus gathered up were sent to Britain and the continent to pay for luxury goods wanted by the wealthier colonists.

After 1777 the French government sent gold and silver to the Continental Congress so that the army under Gen. Washington would get some of its needed supplies. The monies so obtained were, however, usually exported to foreign sources for these war materiels.

As early as 1778 the Confederation Government discussed creating a system of coinage, but there was no real money with which to fund a Mint. There was plenty of Continental paper money but its value fell almost on a daily basis and this inflated currency was of no value in such matters. During the 1780s, after peace was declared, fresh efforts were made in the Confederation to establish a mint but the lack of ready funds defeated these ideas almost immediately.

With the creation of the new federal government under the 1787 Constitution, monetary discussions became more relevant. The new government began operations in April 1789 but it was a few months before Treasury Secretary Alexander Hamilton was able to fund the necessary expenses by getting foreign loans, primarily in the Netherlands.

In early 1790 a petition was presented to Congress, asking for a government contract to strike American coins in an English private mint. Congress ignored the request and instead asked the Treasury secretary to prepare a comprehensive report on a mint and coinage. The report was finished in mid-January 1791 and presented to the legislators at the end of the month.

Hamilton and his advisors studied the world’s monetary systems very carefully and decided that the bimetallic standard, where gold and silver are of equal importance, was the best way to proceed. The Amsterdam money market, then the most important in Europe, indicated that the current ratio of silver to gold was 15 to 1, meaning that one ounce of gold was worth 15 ounces of silver.

Using this ratio as a basis, Hamilton then devised the coinage system presented to Congress. He actually suggested only a small number of silver and gold coins. For silver it was to be the dime and dollar while the gold was also to be a dollar as well as a $10 piece (eagle). To have both a gold and silver dollar was an odd choice and one which, in the end, was ignored.

Congress reacted to the report by asking President George Washington to carry out the provisions suggested by Hamilton. The president attempted to do just that but the lack of a written law created problems and in October 1791 he dropped some rather pointed hints to the legislators and the upper chamber responded by appointing a special committee under Sen. Robert Morris to draft the necessary legislation.

Due to some controversial matters in the Senate bill, the House of Representatives proposed alternative language and by March 1792 the latter had carried the day. The compromise bill was signed into law by the president in early April 1792 and the Mint was now well on its way to becoming a reality.

In the end there were three gold coins created by the new law, the eagle ($10), half eagle ($5), and quarter eagle ($2.50). No new denominations would be added to this list until 1849 when the double eagle ($20) and gold dollar were mandated by Congress. That three denominations were created indicates that the solons expected gold to circulate widely in this country under the new coinage law but this did not prove out in practice.

The first year of operations, 1792, was spent in erecting the necessary buildings and obtaining machinery to create the coins. Only a handful of silver coins, all half dismes, were struck in that year. As the year 1793 came ever closer, Mint Director David Rittenhouse understood that gold and silver coins were out of the question for the time being due to the high bonds demanded of the chief coiner and assayer.

Because of the bond requirements Rittenhouse had little choice except to coin only copper in 1793 but the growing criticism over failure to coin the precious metals led him to appeal to Congress to lower the bonds to more reasonable levels. Congress saw the problem and in March 1794 did as Rittenhouse had asked.

As a result of the congressional action, silver coinage began in October 1794 but gold was delayed until a fair amount of silver had been struck. By early 1795, however, the director was able to notify banks and businesses that gold bullion would be accepted for coinage. The first gold deposit, worth about $2,300, was brought to the Mint in February 1795 by Moses Brown, a Boston merchant/importer.

By early June 1795 Rittenhouse was overseeing the work of chief engraver Robert Scot in preparing the first gold coinage dies, for the half eagle. Because the workers had not yet handled gold for coinage the work went slowly and Rittenhouse was not to see the fruits of his labor in gold while he was still in office; he resigned at the end of June 1795 and was replaced by Henry William DeSaussure of South Carolina.

DeSaussure, at the request of the president, expedited the coinage of gold and was able to oversee the delivery of 744 half eagles on July 31. According to a family tradition, DeSaussure kept for himself the first gold piece struck, but a granddaughter later had it made into a ring. (Once the half eagles had been struck in reasonable numbers, the chief coiner used newly made eagle dies to coin the gold $10 pieces stipulated in the law.)

Although the dies were engraved by Scot, little is known about the origin of the designs on both sides. Liberty wears a cap but this is not a Liberty Cap—suggesting a freed slave—but merely a fashionable ladies’ headdress from the 1790s. Some researchers think that the small eagle on the reverse came from an illustration of an ancient Roman coin but this is speculative.

The half eagle of 1795 also exists, in a rare handful of coins, with the heraldic eagle reverse, first used on the gold coinage in 1796. This particular combination of dies, however, was probably not used until 1798 when a shortage of obverse dies forced the coiner to use older dies for a short period of time.

The third of the gold coins in the 1792 law, the quarter eagle, was first struck in late 1796. The reverse of this coin, however, was new to the coinage in that an heraldic eagle is used, taken directly—or nearly so—from the Great Seal of the United States. This was done on the initiative of Mint Director Elias Boudinot, who had succeeded DeSaussure in late October 1795.

The first quarter eagles had no stars on the obverse, an oddity for early U.S. gold and silver coins, but this was rectified with the next obverse die (also dated 1796), used in late 1796 and early 1797. No further significant obverse changes were made, however, through the end of the design in 1807.

The reverse is somewhat more special than it first appears to be. The Great Seal eagle has of course appeared on U.S. coins from time to time, including the Kennedy half dollars, for example, but in 1796 there was an interesting variation.

Part of the reason for the Great Seal being used on the gold—and later the silver—was the normal European practice of putting the national coat of arms on the gold and silver coins. On this level the United States was merely adhering to standard practice.

On the U.S. version, however, the arrows and olive branch are transposed. In peacetime the arrows are in the eagle’s left claw (to the viewer’s right) and the olive branch in the right claw. In 1796, however, perhaps at the suggestion of the president, the arrows and olive branch were switched, indicating preparation for war.

This alteration could not have been an error by chief engraver Scot as Director Boudinot was well versed in heraldry and was president of the Confederation Government when the Great Seal was adopted in June 1782. (Boudinot was also on the special select committee which finalized the Great Seal design.)

The European government leaders were equally well acquainted with heraldry and the message would have been clearly understood. In particular Great Britain, in open defiance of the Treaty ending the Revolutionary War, had kept control of the upper Midwest until the mid-1790s and even in 1796 was still reluctantly withdrawing some of its troops and Indian agents from that area.

Boudinot was something of a strict taskmaster when it came to the quality of the coinage. On June 20, 1796, he posted a notice reading as follows: “The Director having had frequent complaints that the coin, both gold and silver lately struck in the mint, have been done in a very slovenly, unworkman-like manner, has examined a number of them and is sorry to find that the complaints have not been without foundation, and great negligence and inattention is charged on the coinage department, with regard to the late deliveries of coin. He therefore expects that in the future greater care will be taken that no coin is passed through the mint without being executed in a more perfect manner, as a comparison of the former and latter coin does great discredit to the officers of the mint concerned with the coinage.”

As time allowed, engraver Scot prepared heraldic eagle dies for the gold eagle and half eagle denominations. Die were not made as at present, however, but rather with a small series of hubs. The eagle’s tail feathers, for example, were on one hub, the head on another, and so on. Obverse dies were also made from a series of small hubs.

It is interesting to note that the hubs used for the dies were also meant for other denominations. The half eagle dies, for example, shared these reverse hubs with the quarter dollar dies starting in 1804 while the eagle hubs were also used for reverses of half dollars struck after 1800. Finishing the trio, the quarter eagle reverses matched up with the dime.

Gold coinage was anemic in 1796 and 1797, as merchants and importers had little gold to bring to the Mint but this situation improved in 1798. The director persuaded the Bank of the United States, the semi-official central bank for this country, to bring foreign gold and silver coins to the Mint for recoinage into American monies. This agreement was not as difficult to obtain as might be thought, as Boudinot was an influential director of this bank.

Although gold coinage remained reasonably strong after 1800, it was concentrated primarily in eagles and half eagles. By 1802 Boudinot had become concerned about the gold eagles and silver dollars leaving our shores, never to return. (The gold went to Europe, the silver to the Orient, especially China.)

By 1803 Boudinot was sufficiently alarmed to suggest to the government that coinage of the eagle and the silver dollar be stopped, thus ending the exportation of these two denominations. In 1804, apparently on his own authority, the director did just that.

In order to make this decision more palatable, Boudinot persuaded the Bank of the United States to formally request this cessation of coinage. On that basis Secretary of State James Madison later (1806) issued a formal proclamation.

Because of low demand—and equally low mintages, the quarter eagles of 1796 through 1807 are relatively difficult to find and fairly expensive, especially in the higher grades. In some years (1802 and 1804) reverse dies from the dime coinage were also used for the quarter eagle, the sizes being virtually the same. The scarcest issue of this short-lived series is the 1804 with 13 stars above the eagle. (The 14-star reverse of this date is the more common of the two varieties.)

In general, though there are rare dates, the eagles and half eagles with the heraldic eagle reverses can be obtained without too much trouble, though far from inexpensive. For the eagle the dates of 1799 and 1801 are the easiest to obtain while for the half eagle collectors will have little trouble purchasing several dates, including those from 1802 to 1807.

The halt in eagle coinage did not solve the problem of gold leaving the country. Half eagles left just as fast and by 1805 even Boudinot realized that there was little more that could be done. The problem was made worse by the fact that the international ratio of gold to silver, which had been 15 to 1 in 1792, had moved to about 15.5 to 1 after 1800, meaning that American gold was undervalued with respect to silver and thus in constant demand for export.

The only real solution to this problem was for Congress to change the ratio of gold to silver by amending the 1792 law. Despite constant complaints by knowledgeable people about the situation nothing was done until June 1834, thirty years after Boudinot tried to stop the outflow of gold by halting the coinage of eagles.

A new mint director, Robert Patterson, was appointed by President Thomas Jefferson in 1805 and one of his pet peeves was the artwork on the coins. It had been approved by the administrations of George Washington and John Adams and Patterson felt that Jefferson’s new government deserved a different style of coinage design. To this end he persuaded Jefferson to hire John Reich as an assistant engraver and the result was a new face for Liberty and a revised eagle, both for the gold and silver.

The old Federalist designs of the 1790s were no more after 1807 but modern collectors are still able to appreciate the beauty of our early coinage.

2010 Auction Results Show Lively Market

By Mike Thorne, Coins Magazine December 21, 2010

This article was originally printed in Numismatic News

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What is your collection worth? If you have a “normal” collection, then it’s relatively easy to determine its value. If you have a run of proof sets, for example, or sets of popularly collected items such as Lincoln cents, Buffalo nickels, Mercury dimes and Washington quarters, then appraisal is relatively easy. Value guides abound, and either wholesale or retail prices are readily available for most coins in a wealth of different grades.

But, what do you do if your coins are exceptional, either in rarity or condition or both? How do you determine their value in that case?

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One answer is public auction. You consign your potentially most valuable items to one of the major auction houses, such as Heritage Auctions, Bowers and Merena, or Stack’s. With their advertising, their mailing lists and their multicolor catalogs, you can be reasonably assured that the major auction dealers will obtain the maximum prices possible for your coins, given the prevailing market conditions.

Actually, in 2010 some really great items sold by private treaty rather than at auction, but this is the exception, not the rule. Some of these exceptions included the finest-known 1794 Flowing Hair silver dollar, a 1909 VDB Lincoln cent graded Proof-68 by Numismatic Guaranty Corp., and a Professional Coin Grading Service-graded MS-64 Brown bronze 1943-D cent.

The 1794 silver dollar set a new record for the highest amount paid for a single coin, as it sold for $7.85 million, well above the $7.59 million paid for a 1933 Saint-Gaudens double eagle at public auction in 2002. The seller of the silver dollar was Steven Contursi of Rare Coin Wholesalers, and the purchaser was Martin Logies, director and curator of the nonprofit Cardinal Collection Educational Foundation of California.

Laura Sperber of Legend Numismatics sold the proof 1909 VDB cent, which, in addition to grading Proof-68 Red Brown, also had a star designation from NGC and a CAC (Certified Acceptance Corporation) sticker, both of which are indications of the coin’s desirability and eye appeal. Although Sperber had always contended that the coin was not for sale, presumably the new buyer (the McCullagh Collection) made an offer that Sperber and Legend could not refuse. According to Sperber’s blog, “. . . the coin set a world record above $200,000.”

Obviously, that’s a pretty penny for a lowly Lincoln cent, but it pales in comparison to the $1.7 million paid for the unique 1943-D bronze Lincoln cent. Again, the seller was Sperber. This time the buyer was Bob R. Simpson, co-chairman of the Texas Rangers baseball club, who needed the coin to complete his PDS set of bronze cents dated 1943. He also has a complete set of 1944 zinc-coated steel cents.

But I don’t want to give you the impression that private treaty sales ruled in 2010, as that’s not true by a long shot. In fact, the year started with a bang, as the first major auction featured one of the key rarities in American numismatics, a 1913 Liberty Head, or V-nickel. And it wasn’t just any 1913 V-nickel, it was arguably the most famous one, the coin shown to a nationwide TV audience on an episode of “Hawaii Five-O.”

Graded Proof-64 by NGC, with a CAC sticker, this 1913 V nickel is known as the Olsen specimen, after one of its early owners, Fred Olsen. Olsen paid $900 for the coin in 1943. Other owners included King Farouk of Egypt, Dr. Jerry Buss (Los Angeles Lakers owner), and Texas collector Reed Hawn.

Not surprisingly, given its fame, the Olsen 1913 V nickel was the star of Heritage’s Signature Auction conducted Jan. 6-10, 2010, in conjunction with the Florida United Numismatists convention in Orlando. As such, it did not disappoint.

According to Greg Rohan, Heritage Auctions president, “The bidding on this coin was definitely competitive. The winner is an advanced East Coast collector who, needless to say, now has the ultimate centerpiece to his collection and has assured his place in numismatic history.” His place in numismatic history is assured, of course, only if the collector decides to reveal his identity. Both the seller and the buyer were anonymous in this sale. When the bidding stopped on this piece, the final price, which includes a 15 percent buyer’s fee as do all the other prices in this article, was $3,737,500, which ties it for the third highest price ever paid at auction for a U.S. coin. In 2008, an 1804 silver dollar sold by Heritage achieved that same amount.

Two other coins in the same Heritage FUN auction exceeded the million-dollar mark: a 1927-D Saint-Gaudens double eagle and an 1874 Dana Bickford $10 gold pattern piece. Graded a lofty MS-66 by PCGS, the 1927-D realized $1,495,000, which gives it the second highest amount for which a 1927-D has sold at auction. The $10 pattern, graded PR-65 Deep Cameo by PCGS, brought $1,265,000. Heritage noted that this is only the third time that three coins have sold for more than $1 million in the same sale and the first time that all have been bid over the $1 million mark rather than achieving it through the buyer’s fee.

After this auspicious beginning to the 2010 auction season, only one other coin realized more than $1 million, a 1794 silver dollar. Graded MS-64 by NGC, the coin brought $1,207,500 in the Bowers and Merena Boston Rarities Sale held Aug. 7. The seller was Martin Logies of CCEF, the purchaser of the finest-known 1794 dollar mentioned above.

According to Greg Roberts, CEO of Bowers and Merena, “We started to see bidding activity before the live action began, with multiple bidders moving the coin from its opening bid to $750,000, where the lot opened on the live auction floor. It then quickly moved up $300,000 at increments of $50,000. When the bid hit $1 million on Saturday, the gasp from the crowd was riveting, and with two of the four bidders live in the room, the intensity was overwhelming.” The buyer remains anonymous at this time.

Interestingly, the 1794 dollar was not the rarest dollar sold at the Bowers and Merena auction, as approximately 140 of the date are estimated to have survived. With just nine pieces known, a PCGS-graded XF-40 1870-S Seated Liberty dollar earned $632,500.

Of course, the Bowers and Merena Rarities Sale on Aug. 7 was not the only auction activity in Boston. Heritage was the American Numismatic Association convention’s official auctioneer in Boston. With multiple auction events (U.S. coins, world coins, paper money), the company established a new record for Heritage ANA sales, bringing in more than $46 million. “I’d categorize the auction results as quite strong indeed,” Greg Rohan said, in what has to be an understatement.

The top lot in Heritage’s Platinum Night sale was an octagonal 1851 Humbert $50 gold slug, PCGS-graded MS-63. This piece garnered $546,250 for the seller, which is considerably more than the $40,700 it brought in 1996.

As testimony to the strength of the auction market at the Boston ANA convention, more than 93 percent of the U.S. lots sold in the Heritage auctions. This was true for an even higher percentage of the lots Heritage offered at its September Long Beach, Calif., Signature U.S. Coin Auction, where an impressive 96 percent of the lots found new homes. Top earner was a recently discovered 1856-O $20 gold piece, which NGC graded XF-45+. With spirited bidding, the double eagle climbed to $345,000.

As always, key coins, coins that are typically the highest-priced “stoppers” in popularly collected series, did well at auction in 2010. For example, at Heritage’s Platinum Night sale at the summer ANA convention, an outstanding example of the big key Mercury dime, the 1916-D, sold for $195,500. It must be noted that PCGS graded the piece MS-67 Full Bands, and it has a CAC sticker. Another major key, the 1916 Standing Liberty quarter, brought a hefty $149,500. PCGS graded this gem MS-67 Full Head, and it also carries a CAC sticker. Are these prices what is meant by “sticker shock?”

Heritage offered another nice 1916-D Mercury dime at its Long Beach Signature Auction conducted June 3-6. Graded MS-65 FB by PCGS, this coin sold for $48,875, which is well above its wholesale value.

Yet another example of the 1916-D Mercury dime sold for $74,750 at Stack’s Baltimore auction of the C.B. Slade Jr. Estate in mid June. Certified by PCGS, the coin achieved a grade of MS-66 FB. Another key date sold at the same auction was an 1895 Morgan dollar. Graded Proof-61 (lightly cleaned), the dollar earned $38,525 despite its obvious problems.

For the collector of Saint-Gaudens double eagles, one of the key dates has traditionally been the 1921. In terms of the total number known, the 1921 is perhaps the fourth scarcest coin in the series, behind the 1907 Ultra High Relief, 1927-D, and 1933. At least a couple of examples sold at auction during 2010.

The first one sold at an auction conducted by Ira and Larry Goldberg just before the Long Beach Coin, Stamp and Collectibles Expo held in early February. Graded MS-62 by NGC, this particular 1921 double eagle earned $143,750. At the same sale, a 1930-S double eagle, graded MS-65 by PCGS, went for $161,000, and a high-relief, wire-rim 1907 Saint, graded Proof-67 Star by NGC, garnered $157,550.

The second 1921 double eagle was auctioned by Heritage at a sale held in late April, early May both online and at the Central States Numismatic Society convention in Milwaukee. Graded MS-63 by PCGS, the finally tally was $218,500. This coin was once part of the famous Norweb Collection. Other desirable Saints auctioned in the sale included a PCGS-graded MS-64 1920-S ($126,500), a PCGS MS-66 1932 ($126,500), and a PCGS MS-65 1931 ($92,000).

Another key coin highlighted the Bowers and Merena auction at the Whitman Coin & Collectibles Spring Expo held in Baltimore in early March. The coin was a virtually unimprovable 1901-S Barber quarter graded MS-68 by PCGS. This fantastic coin realized the record amount of $327,750. The coins I’ve been discussing in this section are all rarity keys, coins that are scarce and pricy in any grade. Condition rarities generally do well at auction, also, particularly if they’re especially nice.

One classic example of a condition rarity is the 1927-S Standing Liberty quarter, a coin that’s relatively plentiful in low grades but decidedly uncommon in high grades. An example of this date, graded MS-65+ Full Head by PCGS, with CAC sticker, brought $149,500 in a Bowers and Merena auction for the Whitman Coin & Collectibles Baltimore Expo held in early November. In the same sale, the big rarity key 1916 graded MS-67 Full Head by PCGS, with a CAC sticker, sold for “just” $115,000.

Quite a few error and variety coins sold for hefty amounts during the 2010 auction season. For example, a PCGS-graded MS-65 CAC example of the always popular 1937-D 3-legged Buffalo nickel realized $35,650 at Bowers and Merena’s Orlando Rarities Sale conducted on Jan. 5.

A much rarer error coin, in a much lower grade, sold for nearly six times as much in Heritage’s Long Beach Expo auction in early February. This was a 1943-S Lincoln bronze cent, graded VF-35 by PCGS. One of just seven known, the coin earned $207,000, which is only slightly less than the $218,500 realized for a 1943-P bronze cent sold in Heritage’s FUN auction in January.

At Heritage’s early June Long Beach sale, a 1944-D Lincoln cent struck on a steel planchet realized $60,375. Graded AU-55 by NGC, the coin was from The Brenda John Collection. Another 1944-D steel cent, this one graded AU-53 by PCGS, sold for $37,375 in Heritage’s Summer FUN auction held in July. Some other interesting error coins from the Brenda John Collection (e.g., 1916 doubled die nickel, 1918/7-D nickel) failed to sell.

A Bowers and Merena auction held in conjunction with the Whitman Coin & Collectibles Baltimore Summer Expo (Jun. 18-19) featured major error coins and varieties. The highest grossing lot in the error portion of the sale was an NGC-graded MS-66 George Washington Presidential dollar struck on a feeder finger used in minting the coin. This oddly shaped piece of metal sold for $6,325. A similar Martin Van Buren dollar, graded MS-65 by NGC, brought $5,980. In the same sale, an undated Braided Hair large cent struck 35 percent off center realized $2,875, and a 1927 doubled die obverse Lincoln cent PCGS-graded MS-64 Red went for $2,645.

A couple of collections of early copper errors were featured at a pre-Long Beach sale held by Ira and Larry Goldberg Sept. 19-21. One was the Davy Collection of errors on half cents and the other was the Dan Holmes collection of large cent errors. The top grossing lot was a VF-25 1802/0 half cent, reverse of 1803, struck over a spoiled large cent, which realized $24,150. Next was an 1804 F-15 half cent, spiked chin, with an obverse brockage (mirror image of one side of the coin impressed on the other side), which garnered $23,000.

Even books about coins sold well in 2010, with a George Frederick Kolbe auction held in New York City on Jan. 9 realizing slightly more than $1 million. The auction consisted of 400 lots from the Stack family library and 100 American Numismatic Society duplicates.

According to Kolbe, the 500 lots were estimated to bring in $540,000, so the actual results went well beyond expectations. In addition, every lot sold, which is an amazing feat by itself.

On hand at the auction was Harvey Stack, who joined the family firm in 1947. Stack called the first few lots and then returned for Lots 79 and 80, which featured photographic and other records of the Stack family’s acquisition of Col. E.H.R. Green’s gold coins. Each lot realized $80,500.

Kolbe’s firm auctioned the second part of the Stack family library on June 3, and the tally for this auction was more than $140,000. This time the take was only slightly more than the pre-sale estimate. One highlight of the sale was the Coin Galleries set of Stack’s catalogs, which realized $21,000, more than twice the estimate.

When writing an article like this, it’s easy to focus on the super coins and the auction lots that brought in the largest returns. For the majority of collectors, however, these coins are the antithesis of what they actually collect or even aspire to own. Because of this, I’ve selected a few auction lots from recent auctions that may be of more relevance to most collectors.

Teletrade is one auction firm that sells many coins that are so affordable that anyone can own them. If you’re interested in key coins in popular sets, Teletrade probably offers them in grades that you and I can afford. For example, a 1909-S over horizontal “S” Lincoln cent graded XF-45 by ANACS sold for $180 on Oct. 4.

For the Indian cent collector, Teletrade offered the big key, the 1877, in PCGS AG-3 in an auction on Oct. 5. The coin realized $402, which is a fraction of what a higher-grade piece would cost you.

If those are too pricy for you, what about a 1955-D Roosevelt dime in PCGS MS-66 Full Bands? This coin sold for $55 on Oct. 4.

Although Heritage Auctions sold three coins for more than $1 million apiece in its first auction of the year, Heritage also sells many coins at auction that are decidedly less expensive. I’m a particular fan of its Exclusively Internet auctions and have bought thousands of dollars’ worth of coins from this venue. Here are a few examples of coins sold recently at auction by Heritage: On Nov. 30, an 1862 Indian cent graded AU-55 by PCGS brought $64; on Nov. 28, a 1912-S V nickel in VG-8 (PCGS) realized $138; and on Nov. 21, a 2009-S Roosevelt dime graded Proof-70 Deep Cameo by PCGS went for $34.

I could list many more examples like this, either from Heritage or Teletrade or from other major numismatic auction companies, but you get the picture: Whether your taste and budget permit you to buy five- and six-figure coins, or whether you have to be content with two- and three-figure coins, you can find what you want at auction.

Last, but by no means least, the Original Hobo Nickel Society held its annual auction in conjunction with the 2010 FUN convention in Orlando. To the uninitiated, hobo nickels are artfully carved Buffalo nickels. Although the total take from the auction’s 97 lots of nickels and postcards was some $13,000 less than at the same auction in 2009 ($34,680 vs. $47,701), the price paid per lot was actually higher, as there were fewer lots.

The top lot was a “Bo’s Brother” carving by a famous hobo nickel carver, George Washington “Bo” Hughes. The coin went for $2,750, whereas the next highest lot was a carving of an Indian chief, also attributed to “Bo,” which realized $2,310. If you’re interested in hobo nickels and would like to participate in future auctions, dues are $15, with information available at www.hobonickels.org.

Well, that’s it for my annual survey of numismatic auctions. As in the past, great coins (and some not-so-great coins) found ready buyers at auctions throughout the year. Prices increased, new records were set, and, in general, both buyers and sellers achieved their desired ends. With the year-long increases we saw in the precious metals markets in 2010, 2011 may prove to be even more lucrative for coin collectors than 2010. It’ll be interesting to see what effect that will have on the auction scene. I can hardly wait.

 

Wednesday, December 22, 2010

Mint News Blog Quick Updates

Gold and Silver’s Bright Future Still ‘Secret’

By Patrick A. Heller December 21, 2010

There are significant developments in trading of Classic U.S. gold coins now. As happens every year, wholesalers who are situated in states with an inventory tax on Dec. 31 are busy trying to trim their stocks. One consequence is that U.S. gold marketmakers in Texas have pulled their bids until the new year.

Don’t worry. This might be a good time to remember the long-term and why you are interested in gold and silver in the first place.

Gold and silver prices peaked in January 1980 when just about everybody in the world was aware of the Hunt Brothers’ attempt to corner the silver market, consumer prices were soaring and home mortgage rates were at 14 percent or so.

At the time, it seemed like a huge segment of the public was talking about how gold and silver prices were going to keep going up and up and that it was a good time to be buying. In reality, when almost all potential buyers had jumped into the markets, that was a signal of the market top.

Back then, there was a sharp spike in prices before they fell almost as quickly. For instance, gold peaked at $850, but it only closed above $700 on four days.

Before I go into what the public doesn’t know about the gold and silver markets today, let’s consider their lack of general financial knowledge. The public’s economic ignorance is rampant. Sometimes the lack of knowledge is fostered by government officials, sometimes by incompetent media reporting and other times it appears that the reporting may be skewed by a reporter with a dishonest agenda. There are so many examples, there isn’t room to cite more than a handful.

From the Federal Reserve Open Market Committee on down, politicians are claiming that consumer prices are not increasing fast enough and that the government must inflate the money supply to cure this “problem.”

Sure, the pronouncements by some government officials do get reported. But the reports don’t provide the context so that the public can better understand what is happening. Here are samples of what I mean.

On Oct. 5, just before top federal officials (including President Obama, Fed Chair Bernanke, and Treasury Secretary Geithner) announced plans to inflate the U.S. money supply starting after the elections, the 10-Year U.S. Treasury debt interest rate was 2.474 percent. On Dec. 20, it closed at 3.36 percent, an increase of 35.8 percent in 10 weeks. Does the public realize that this indicates what is going to happen to the value of the U.S. dollar?

Or does the public comprehend the disconnect between two significant indicators of inflation when the November Producer Price Index (PPI) jumped 0.8 percent (about 10 percent annually) versus the Consumer Price Index (CPI) which was only up 0.1 percent (just over 1 percent annually). The PPI is generally a more accurate indicator of what will be happening to consumer prices in the coming months where the CPI measures what changes have occurred in the recent past. If you did a survey of the general public, how many would be aware of the PPI figure and its implications?

Another scary example of public ignorance is the looming crisis in state and local government budgets. Federal stimulus funds were used to temporarily cover the deficits of agencies that are required to have balanced budgets, but that source of revenue is over. The impact of sharply smaller revenue streams leads some analysts to expect that this one financial problem will prevent any economic recovery in the United States, will lead to at least one million lost state and local government jobs, and eventually force the U.S. government to create money out of thin air for a record-sized bailout. Yet the seriousness of this crisis is little covered by the mainstream media. Certainly, no one in Washington wants to talk about it.

In the past two years, state and local governments together have spent nearly a half trillion dollars more than they collected in taxes, plus fell about one trillion dollars further behind in funding public pension liabilities.

When interviewed for the Dec. 19 broadcast of CBS’s 60 Minutes, Meredith Whitney, a financial analyst who made her reputation by warning that the big banks were in trouble long before the 2008 collapse, said “The most alarming thing about the state issue is the level of complacency. It has tentacles as wide as anything I’ve seen. I think next to housing this is the single most important issue in the United States, and certainly the largest threat to the US economy.” When Steve Kroft asked why the public wasn’t paying attention to this crisis, she said, “’Cause they don’t pay attention until they have to.” As much as the public lacks knowledge about what is really going on with the U.S. economy, their ignorance of the gold and silver markets is even worse. If you were to survey the general public, how many do you think realize—

• That foreign owners of U.S. dollars are becoming more aggressive at dumping the U.S. dollar for tangible assets such as gold, silver and other commodities?

• That buyers in the Far East are having such a difficult time acquiring physical gold and silver that they are now buying paper contracts and paying with U.S. dollars? This strategy enables the buyers to get rid of tens of billions of U.S. dollars, and gets them most of the way toward owning physical metals. As the buyers later find physical metal, they have been paying a premium in order to turn their paper into the real metal.

• The major governments have failed to come to an agreement to avoid a currency war where each issuer tries to knock down the value of its currency by more than the others?

• That the U.S. government has a huge incentive to suppress gold and silver prices – to help hold down the interest rate that it pays on Treasury debt?

• That the U.S. government has changed the terminology in describing its gold holdings from “Gold Reserves” to “Custodial Gold,” which is a sign that the U.S. government may no longer have title to all the gold it supposedly holds?

• That central banks, collectively, have turned from long-term net sellers to net buyers of gold reserves?

• That China is aggressively seeking to replace the U.S. dollar as the unit of payment for international transactions? As demand for the U.S. dollar declines, that will further impair its value.

• That gold and shares in gold mining companies now make up less than 1 percent of global investment portfolios, whereas it was well over 20 percent in 1980?

• That the price of gold, even though at a nominal high, is still not much more than halfway to the inflation-adjusted January 1980 peak price? Or that the price of silver would have to at least quadruple current levels to beat the January 1980 peak?

Today, the mainstream media carries many stories about so-called “experts” proclaiming that gold and silver prices have peaked. Unless they completely ignore the foregoing list and more, I just don’t see how they come to such conclusions.

The price of gold from the end of 2009 through Dec. 20 has risen 26 percent; silver has soared 74 percent. As good as those results are, in my judgment the prices of gold and silver in 2011 will rise by much greater percentages. As the public gradually understands what is really happening with precious metals, the growing demand for physical gold and silver will expand. If you want to give yourself a gift that you will appreciate for years to come, pick up some gold and silver soon.

Patrick A. Heller owns Liberty Coin Service and Premier Coins & Collectibles in Lansing, Mich., and writes “Liberty’s Outlook,” a monthly newsletter on rare coins and precious metals subjects. Past newsletter issues can be viewed at http://www.libertycoinservice.com. Other commentaries are available at CoinUpdate (http://www.coinupdate.com). He also writes a bi-monthly column on collectibles for the “Greater Lansing Business Monthly” (http://www.lansingbusinessmonthly.com/articles/department-columns). His radio show “Things You ‘Know’ That Just Aren’t So, And Important News You Need To Know” can be heard at 8:45 a.m. Wednesday mornings on 1320-AM WILS in Lansing (which streams live and becomes part of the audio and text archives posted at http://www.1320wils.com).

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