“All the way to $1,440”

With all eyes on Libya and the threat of revolutionary contagion across the Arab world, gold roared past the key $1,400 level this week to just under December’s record high. What’s driving gold? “It is dominated by the Middle East fears and the weaker dollar,” said Standard Bank analyst Walter de Wet. “We think we could easily test the highs again for gold. It could go all the way to $1,440.” According to James Dailey of the TEAM Asset Strategy Fund, “This move in gold right now is acutely about the Middle East. The trade is about fear, but people are viewing it as an extension of the inflation trade.” Read more

“Nobody is looking for lower gold”

“The unrest and the fear in these countries is increasing,” said LGT Capital Management’s Bayram Dincer. “These uncertainties on the geopolitical risk side are driving the gold market. See how easily gold broke $1,390, $1,395, which were strong resistance levels, and now the $1,400 psychological level. It seems nobody is looking for lower gold prices.” Read more

$5 gas could tank our economy

If political unrest in Libya spreads to other oil-rich countries and the ensuing chaos disrupts crude production, gas prices could explode by peak summer driving season, analysts say. “If this thing escalates and there’s a good chance that there’d be a shift in supplies, $5 gas isn’t out of the question,” said Darin Newsom, senior analyst at energy tracker DTN. Deutsche Bank called the current $120 crude-oil futures price a “key threat to global growth.” The doomsday scenario here is if revolution topples the precarious monarchy in oil-rich giant Saudi Arabia. The ailing King Abdullah has just promised to spend $36 billion in emergency welfare measures to stave off riots in his nation. Will his bribe calm his desperate populace? We just don’t know. Read more

Yellow gold to outperform black gold?

Even if oil prices gain, Credit Suisse thinks bullion might do even better. “We see potential for gold to outperform oil over the coming months,” analyst Stefan Graber said. “We think an ounce of gold could potentially buy a few additional barrels of oil. This assessment is based on our positive view on gold versus a neutral view on the oil market.” Gold’s role as an inflation hedge will grow as consumer prices increase worldwide, he said. Read more

Gird up with gold during war

“Gold still represents the ultimate form of payment in the world. Germany in 1944 could buy materials during the war only with gold. Fiat money in extremis is accepted by nobody. Gold is always accepted.” So said former Federal Reserve chief Alan Greenspan in a widely known remark. “Gloom, Boom & Doom Report” publisher Marc Faber echoed Greenspan in a recent speech to investors in Bangkok. If war erupts from the metastasizing violence in the Middle East, gold and silver would be desirable investments to hold, said Faber, who is famous for predicting the 1987 stock-market crash. “The key is flexibility. We don’t know how the world will look in 10 years’ time,” he noted, saying U.S. Treasury bills might no longer be a sure bet against market volatility. Read more

Gold now carries “geopolitical premium”

“With regime change in the Middle East, we see gold rallying again,” HSBC chief commodities analyst Jim Steel said in a Feb. 22 CNBC interview. “There is no doubt there is a geopolitical premium I think in gold now. … These major geopolitical events that impact gold don’t happen all that often. We’re mostly used to watching inflation numbers, balance-of-trade issues, dollar-euro, Fed policy – things like that. … These geopolitical issues come along” rarely, Steel says, but “I think it could build a healthy premium, you know, probably for quite some time.” Watch video

“Currency of fear” feeds on uncertainty

Gold is “a currency of fear … when people see there are problems, they will tend to it,” Kingsgate CEO Gavin Thomas told CNBC on Feb. 22. “I think that these higher oil prices will bring on the specter of possible inflation. … And I think that all bodes well for gold in the near-term future.” Thomas predicts “gold will continue a long-term trend upwards.” Watch video

Domino-like debt bomb still looms

“Even without these tensions in the Middle East, we still expect a sovereign-debt crisis in the United States and in Europe, especially now with inflation rising,” Tyche executive Martin Hennecke told CNBC on Feb. 21. “Because we think there’s still this sovereign-debt crisis out there, we have maintained our high positions in precious metals, gold, and silver. … And those – while they are primarily on there as a hedge against the Western debt crisis, inflation, and on Asian demand – that at the same time also protects you somewhat from these Middle Eastern crises.” Watch video

U.S. budget disaster the next 9/11?

Libya, Egypt, Bahrain, Yemen, Algeria, Morocco, and Saudi Arabia are not the only places in the world grappling with unrest. There’s also China, whose totalitarian state is cracking down on the threat of a “Jasmine Revolution” in its borders. And then there’s Wisconsin, whose unionized state employees are vehemently resisting proposed austerity measures. On NBC’s “Meet the Press” Sunday, CNBC’s Rick Santelli compared the budget crises affecting state and federal balance sheets to a Sept. 11-type attack on the nation. “If the country is ever attacked as it was on 9/11, we all respond with a sense of urgency,” Santelli said. “What’s going on on balance sheets throughout the country is the same type of attack.” Is the tense standoff in Wisconsin just a precursor of things to come for other cash-strapped states and cities in America? Read more

Pension burdens threaten state ratings

“Cash-strapped U.S. states and cities face the prospect of downgrades after Fitch Ratings changed the way it analyses their burgeoning pension bills,” according to London’s Financial Times. The rating agency’s potential downgrades might be a catalyst for the Fed to extend its gold-friendly quantitative-easing program for a third round. Slashed credit ratings among the states also might put more pressure on the debt-ridden federal government to come to the rescue with costly bailouts. Read more

“Get the heck out” of stocks

Paul Farrell at MarketWatch rocked the Web last week with his impassioned call to end the Fed’s power monopoly. Now he’s setting a deadline for an imminent stock crash. “Get the heck out of Wall Street’s stock market casino soon, maybe as early as July 4th, and definitely get out by Christmas, because soon all the lies, lying, and liars will stop working.” Farrell notes that “the market’s just a shade above its 2000 peak. Adjusted for inflation, Wall Street stocks have lost roughly 20 percent of your retirement money the past decade. Get it? Wall Street’s a big loser the past decade. And they’ll lose another 20 percent by 2020. Why? Because 93 percent of what comes from Wall Street is suspect, can’t be trusted.” Read more

New gold high “within shouting distance”

“Bullion is now back to within shouting distance of its early December high,” notes Mark Hulbert in a MarketWatch column. “The $64,000 question now, of course, is whether gold’s rally will soon take the yellow metal into new high territory. Contrarians are betting that it will.” Noting that “the average gold timer is still allocating more than half of his gold portfolio to cash,” Hulbert says “there is a lot of sideline cash ready at a moment’s notice to be shifted into the gold market to propel gold higher.” Could the spark for that move come from the Middle East’s explosive turmoil? We don’t know. Read more

Silver’s smoking-hot streak

On a tear unseen since the notorious Hunt brothers cornered the market in 1980, silver prices hit a series of new 31-year highs this week and indeed set a new all-time record when priced in euros. By the time you read this, the white metal may have already cracked the $34 mark. Hedge funds have helped boost silver by increasing their net-long positions on the Comex in the longest streak since September. “With the Middle East deteriorating, and the threat of inflation, you’ve got the big money flowing back into silver and precious metals,” said Matt Zeman of LaSalle Futures Group. Read more

Asian demand pumping up gold

A World Gold Council report illustrates the gold rush occurring in Asia’s rapidly expanding emerging-market economies, led by China and India.

China: Gold investment in China jumped 70 percent last year and consumption by the jewelry sector gained to a record as investors stepped up purchases of the precious metal as a store of value, the council reported. Read more

India: Gold imports by India, the largest consumer, climbed to a record in 2010, driven by a surge in jewelry demand and amid expectations that the 10-year rally in prices would extend, the council said. “The rising price of gold, particularly in the latter half of the year, created a ‘virtuous circle’ of higher price expectations among Indian consumers, which fueled purchases, thereby further driving up local prices.” Read more

“The fire of the love trade”

Fear but also love motivates people to snap up gold, notes U.S. Global Investors chief Frank Holmes in analyzing the council’s report: “The love trade is significant and unique to gold. People buy gold out of love and those in emerging markets are especially amorous of the metal. In fact, the four strongest markets for gold jewelry demand (India, Hong Kong, China and Russia) accounted for 60 percent of the entire jewelry market in 2010. … If countries like China and India continue to grow by 7 to 9 percent a year, the corresponding rise in incomes should keep the fire of the love trade burning. In this scenario, gold can continue to slowly appreciate.” Read more

A “staggering” Chinese gold standard

“China’s grab for gold is accelerating at a rapid pace, and it’s raising questions about the country’s ultimate intentions,” notes Alix Steel of The Street. “It’s unknown how much of that gold was consumed by citizens or its central bank, but the question still remains: What will China do with all that gold? There is a controversial theory percolating in the gold community that China wants the yuan to become the world’s reserve currency and is buying gold and silver in order to do it. A Chinese gold standard? The idea is staggering and not to mention fraught with difficulties.” Read more

“Disgust” drives states back to gold

China’s not alone in recognizing the stability granted by gold-backed money. “Legislators in a dozen states are looking at legislation about gold- or silver-based currency, including, right now, Utah, South Carolina, Virginia and New Hampshire,” notes Ralph Benko of the American Principles Project. “States haven’t issued money for over a hundred years. So … why now? There is disgust by state legislators with the federal government’s promiscuously printing money. This reflects the views of those who wrote and adopted the United States Constitution.” Read more

Silver miner tarnishes U.S. dollar

Pan American Silver Corp., the world’s fourth-largest silver producer, said it’s shifting its currency holdings into Canadian dollars, betting the U.S. dollar may fall further. The world’s reserve currencies are struggling to maintain their value amid “ridiculous” debt levels, chief executive Geoffrey Burns said. “We diversified some of our currency holdings into Canadian dollars away from U.S. dollars to provide more stability in the event we do see continued weakness in the U.S. dollar.” Read more

Rising inflation fans gold’s flames

“One of the key forces contributing to expected gold-price strength is the acceleration in inflation now underway around the world,” writes Jeffrey Nichols of American Precious Metals Advisors. “Today’s global inflation is largely a consequence of U.S. monetary policy and the unbridled flood of dollars into the world economy. … It’s no wonder that smart savers and investors in China and India are buying hundreds of tons of gold a year – and will most likely continue to do so even as gold prices move significantly higher. … [The Fed’s monetary policy] must eventually result in a significant erosion in the greenback’s purchasing power brought on through a depreciation of the U.S. dollar in world currency markets and an acceleration of inflation here at home.” Read more

Era of getting rich in America is over

As our standard of living declines and Asia’s increases, we’re seeing a paradigm shift, and Western investors should focus on keeping wealth, not gaining it, says Dow Theory Letters publisher and gold bull Richard Russell. “Up to 2009 I think the idea in America was to make as much money as you could and to live as well as you could. The U.S. was the land of leveraging, borrowing, credit, and opportunity. From 1982 to 2007 the stock market climbed steadily higher, and those who owned stocks prospered. After 2009 it was a different story. I believe that from now on, the idea will be to hang on to as much of our wealth as we can. In other words, from here on the trick will be to avoid losing money. He who loses the least will be the winner.” Read more

“Rare collector coins in all grades” are going up

Precious metals are one solid way to preserve your wealth. And diversifying your metal holdings with rare coins can even help you grow your wealth, not just preserve it, according to Professional Coin Grading Service numismatist David Hall. “What’s going up [in price]? Rare collector coins in all grades. So you’ll see some of the early Bust coinage, some of the Liberty Seated coinage – the better dates – doing very, very well. You’ll see the extreme grades for all series doing very, very well. The nonmodern stuff, that is, the pre-1964 stuff, the pre-1965 stuff, when we had silver in our coins. That’s doing very, very well. So basically the last 12 months – very positive for rare coins. … We’re in the midst – and have been for over 10, 15 years, in my opinion – of a coin-collecting renaissance.” Read more

2011 Medal of Honor Commemorative Coins: $5 Gold Proof and Uncirculated and Silver Dollar Proof and Uncirculated 

The United States Mint will begin accepting orders for the 2011 Medal of Honor Commemorative Coins on February 25, at noon Eastern Time (ET).

Public Law 111-91, the Medal of Honor Commemorative Coin Act of 2009, authorizes the bureau to mint and issue a maximum of 100,000 $5 gold coins and 500,000 silver dollars:

• in recognition and celebration of the establishment of the Medal of Honor in 1861;
• to honor the American service members who have been recipients of the Medal of Honor;
• and to promot
  e awareness of how ordinary Americans can challenge fate and change the course of history.

The coins will be available in proof and uncirculated qualities. Pricing for the 2011 Medal of Honor Commemorative Coins is as follows:

The introductory sales period ends on March 28, 2011, at 5:00 p.m. ET, when regular pricing takes effect.

Orders will be accepted at http://www.usmint.gov/catalog or at 1-800-USA-MINT (872-6468).  Hearing- and speech-impaired customers with TTY equipment may order by calling 1-888-321-MINT (6468).

All domestic orders will be assessed a $4.95 fee to cover shipping and handling costs.

Surcharges from the sale of each coin-$35 for each $5 gold coin and $10 for each silver dollar-are authorized to be paid to the Congressional Medal of Honor Foundation to help finance its educational, scholarship and outreach programs.

About the United States Mint

The United States Mint, created by Congress in 1792, is the Nation’s sole manufacturer of legal tender coinage and is responsible for producing circulating coinage for the Nation to conduct its trade and commerce.  The United States Mint also produces proof, uncirculated and commemorative coins; Congressional Gold Medals; and silver, gold and platinum bullion coins.

Note:  To ensure that all members of the public have fair and equal access to United States Mint products, orders placed prior to the official on-sale date and time of February 25, 2011, noon ET shall not be deemed accepted by the United States Mint and will not be honored.  For more information, please review the United States Mint’s Frequently Asked Questions, Answer ID #175.

Having criticized the generic term “The Mint” several times in the past few years for actions which were sometimes the fault of the Treasury Department or Congress or others, I thought it might be a good time for me to compliment the United States Mint proper for one of its generally successful numismatic programs, the Proof set.

Although many of the commemorative coin and medal programs dumped in the lap of the U. S. Mint by a greedy and/or indifferent Congress since 1936 have proven to be less than wonderful, whether in marketing or design or purpose, the regular design Proof sets offered as superior examples of the coiner’s art have generally been considered to be a credit to the Mints that have struck them. Though some of the post-1967 sets have declined in value since they were originally sold, this is generally not the fault of the Mint, but rather the fault of speculators who overbuy an issue in the hopes it will prove scarce and then dump it on the market if it does not.

The first of the three modern eras of Proof sets began in 1936, after a 20-year lapse allegedly caused by concern over the impending entry of the U.S. into World War I (which did not occur until April of 1917), but more likely brought on by collector dislike of the Matte Proof finishes used on certain coins of the 1908-1916 period and the technical difficulties involved in trying to “Proof,” or polish, the textured surfaces of the new 1916 silver coins.

I have no idea why the 1916 Barber Dime and Quarter were not struck in brilliant Proof even if there were no plans to strike a 1916 Barber Half, but as sales of the silver Proof sets had fallen drastically in previous years (380 in 1914 and 450 in 1915) it may have been thought that they just weren’t worth the bother. The classical Proof set era begun with a bang in 1858 ended with a whimper in 1916 with only the Matte Proof Cent and Five Cents being offered to collectors, no regular issue gold coins being struck in Philadelphia in 1916 and hence no Proofs.

Once the decision was made to stop making Proofs, bureaucratic inertia saw to it that the same policy was observed in the next year, and the next, etc. I have never seen a good reason given as to why the production of Proof coins was resumed in 1936, but it is possible that the commemorative coin frenzy which reached its peak in that year inspired the Mint to imitate the Post Office, which since 1934 had been making a tidy sum selling specially prepared souvenir sheets of otherwise regular design stamps to collectors.

The earliest sets sold in 1936 lacked the brilliant finishes of the pre-1909 Cents, pre-1913 “Nickels” and pre-1916 silver coins, and it is generally believed that this was simply due to the Philadelphia Mint’s personnel having forgotten how to make brilliant-finish Proofs. It is remotely possible that the dull finishes were the result of official indifference to what was considered to be just another money-making scheme until collector response, and criticism, forced the Mint to upgrade its product, but this is merely speculation on my part.

The textured surfaces themselves, which were an integral part of the Fraser design for the 1913 Indian Head Five Cents and which were copied in a somewhat subdued fashion by A. A. Weinman for the 1916 Dime and Half, had long been lost to erosion and remodelling of the master dies and hubs for these coins. The Lincoln Cent design lent itself perfectly to brilliant Proofing, as did the relatively new (1932) Washington Quarter design.

As was the case before 1916, the Proofs were sold both in sets and individually. The coins were placed in cellophane sleeves (which tended to get brittle and crack open with age) simply as a temporary shipping measure, although many people chose to leave the coins in the original packaging as though the holders actually meant something. The popular Lincoln Cent usually outsold the silver issues by about 50%, the modernistic (at that time) Washington Quarter usually being the poorest seller by just a small margin, with the new Jefferson Five Cents generating significant novelty interest in 1938 and outselling the Cent that one year.

The sleeves were usually stapled together into sets for ease of packing and shipping, though they could be bundled together any other way that the customer ordered them. At Harlan Berk’s last year we purchased a run of 1938 to 1942 Proof sets from the son of their original purchaser, all in the original cellophanes with the original cardboard shipping boxes, plus two groups of ten each 1942 Cents and 1942-P Five Cents stapled together and placed in cardboard boxes just like the individual sets.

The 1942 set in this group was the type one set with only the copper-nickel Five Cents piece, which may explain why the collector ordered the 1942-P coins after the wartime silver alloy was introduced on October 8th of that year. Strangely enough, this was not the last time that the Mint has offered one denomination in Proof apart from the regular sets.

If the wartime demand for coins was the cause for suspending Proofs in 1942, then the reason they were not resumed until 1950 can only be that old bureaucratic standby, inertia. Domestic coinage demand fell after the war from 2.156 billion pieces in 1946 to only 645 million pieces in 1949, and the Philadelphia Mint actually shut down regular issue production for two months starting June 13, 1950, because of the lack of demand for coins.

Apparently someone decided that making Proof sets would be a good outlet for part of this excess capacity, and so the second modern era began in 1950. According to the July, 1950, issue of “The Numismatist,” legislation which permitted the Mint to resume the manufacture of proof coins was passed on May 10th of that year, though I am not sure why such legislation would have been necessary and not simply an order from the Secretary of the Treasury. Perhaps politics was to blame–theoretically the Treasury Secretary has the lawful authority to change the designs of all of the current regular issue designs by decree, but lacks the political clout to do so and survive the second-guessing of others.

The item goes on to state that as of its writing (June 7) the sets “are not yet on sale nor has the price been decided on. However, our Proof makers are working three shifts and collectors can be assured that there will be sufficient 1950 proofs to supply the demand…it is suggested that all collectors withhold their orders for to send them in now would only cause backlogs and confusion at the Mint.”

The August issue stated that the sets were placed on sale on July 17th at $2.10 each, the difference between the 91 cents face value and the selling price covering “the special work which is required for proofing the coins and for postage,” although no discount was given for sets purchased over the counter or in quantity. This question of excess postage charges built into the price of multiple sets was to be raised again in 1968.

The article went on to state that the Mint was beginning sales with approximately 10,000 sets on hand, with a temporary limit of five sets per person until the expected initial rush of orders could be handled. Sales were good, perhaps due to the imaginary shortage suggested by the limit on sales, and a total of 51,386 sets were sold, roughly 2-1/2 times the number of 1942 sets.

Once again the earliest production, probably the 10,000 sets mentioned above, lacked the brilliant finish of the previous proofs, though the quality of the coins improved after collector complaints. However, the packaging remained the cheap cellophane sleeves in a cardboard box of the pre-war sets, which was intended by the Mint simply as a safe way to mail the coins and nothing more.

Rather than automatically removing the coins from the holders and placing them in their collections, as the Mint assumed the collectors would, most collectors carefully preserved the original packaging and even began paying a premium for unopened sets that they themselves would never look at! This unopened box mania collapsed after a few people discovered that the “unopened” sets they had bought on the secondary market had been steamed open and resealed and now contained steel washers of the approximate size and weight of the missing proof coins.

Sales increased slowly over the first few years, and finally began to climb in 1954 under the personal care and promotion of the new Philadelphia Mint Superintendent Rae Biester, who sought to avoid a threatened round of layoffs by increasing Mint output via Proofs. Biester went so far as to write personal notes thanking buyers of the 1953 Proof sets, and inviting them and their friends to buy the 1954 and subsequent sets.

Under Biester’s administration the packaging was improved by placing the coins between two sheets of plastic divided into pockets via a simple pressure bonding, which allowed the coins to be viewed and displayed without removing them from their original holders. These “flat packs” appeared in mid-1955, and this is the only year which is collected by holder variations (other than by product variations).

Collectors approved of the change, and the million set mark was quickly reached as sales nearly doubled from 378,200 in 1955 to 669,384 sets in 1956 and nearly doubled again to 1,247,952 sets in 1957. This last figure was due in part to the Prudential Insurance Co. speculating in over 100,000 of the sets, the largest numismatic transaction up to that date, though they later changed their investment strategy and dumped the sets back onto the market, depressing the bid for them to less than issue price.

The earliest 1960 sets contained the Small Date Cent, which in Uncirculated condition had ignited the B.U. roll market in particular and the U.S. coin market in general, and these sets quickly became worth five and ten times their issue price. Sales of Proof sets jumped from 1,691,602 in 1960 to just over three million for each of the next three years, setting the stage for the 1964 Kennedy Proof set and the suspension of Proof coin production.

The growth of the coin-operated vending machine industry in the late 1950’s and early 1960’s caught the Mint, which had mothballed its most modern facility in San Francisco in 1955, completely by surprise, and the coin shortage caused by these machines was aggravated by widespread hoarding of the new Kennedy half in 1964 and the Mint’s devotion of more and more of its capacity to trying to meet this demand.

Sales of the 1964 Proof set in the Fall of 1964, at the traditional price of $2.10, quickly reached the unheard-of level of 3,950,762 sets, at which point sales were discontinued and the prices for the sets on the secondary market shot up to $20 or more. Citing the need to convert its Proof coin capacity back to regular coin production, though perhaps piqued at the shameless profiteering in its product, the Treasury then announced that no Proof sets or Mint sets (one Uncirculated coin of each denomination struck at each Mint) would be issued in 1965 or for the foreseeable future.

As a concession to collectors the Mint subsequently announced that it would issue “Special Mint Sets” containing one coin of each denomination at $4 per set, to be coined at the old San Francisco Mint reopened as the San Francisco Assay Office, but without Mint marks as those had been eliminated on coins dated after 1965 to discourage speculating in rolls and bags. The 1965 sets were packaged the same way as the 1964 Proof sets and were generally a bit above the quality of the 1964 Uncirculated sets, with the occasional coin showing evidence of the dies being polished before use.

The 1966 and 1967 SMS sets were packaged in hard plastic holders purchased from the Whitman Coin Products division of Western Publishing and ultrasonically sealed, setting the stage for the fancier holders used when Proof set production officially resumed in 1968. The 1966 and 1967 SMS coins are neither fish nor fowl as to their status of Uncirculated vs. Specimen coins, as they show progressively better care in the polishing of the dies and the handling of the struck coins, and I have seen at least one 1967 SMS half with absolute ‘proof’ on it that it was struck twice in the press (namely a piece of lint with a distinctive pattern to it which was impressed into the surface in two slightly different locations). However, the Mint maintains that these are not Proof coins because they were not sold as Proof coins. No matter.

The third era of modern Proof sets began in 1968 with S Mint marks on the Proofs to acknowledge the fact that the numismatic department had effectively moved to the West coast. The sets were offered for sale at $5 each beginning November 1, 1977 for delivery over the course of 1968, and the estimated capacity of some three million sets was reached in May of 1968. Many went to people who remembered how the last Proof set had shot up in 1964, and wanted to speculate in the new ones.

There was some grumbling over the fact that this $5 price included an allowance for Registered Mail delivery for each set, to avoid the relatively high number of claims, legitimate or otherwise, that were filed for 1964 Proof sets which seemed to disappear from the Insured Mail, but with no allowance for a reduction in the Registered Mail fee if multiple sets were ordered. The Mint eventually claimed that the price reflected an average cost of shipping all orders, and that the Mint was actually losing money on the sale of single sets, but nobody took them seriously.

I do remember that when the order forms came out I had just $85 to spare to my name, and so I sent in for 17 sets out of the maximum limit of 20. Perhaps because the Mint was filling odd-size orders first (I am guessing) I was extremely lucky to be one of the first persons on the West side of Detroit to receive my sets. They came on a Friday, and I sold them at a coin show that weekend for $13 each and applied the money to my first Quarter’s tuition (a whole $102!!!) at Wayne State University in Detroit. Eventually the speculation broke, and today at Berk’s we sell them for $3.75 each, retail.

In November of 1968 the feeding frenzy repeated itself, only this time the three million set limit was reached in six days!!!Once again I lucked out in being among the first ones in Detroit to receive my sets, and I immediately took them downtown to Earl Schill where I traded them for the 1909-SVDB cent I needed to complete my Lincoln collection, plus $120 cash. I believe he allowed me $14.25 per in trade; we now sell them for $3.75 also.

All of this worked to generate orders for 3.2 million of the 1970 sets by the Dec. 31, 1969, even though the limit was reduced to five sets per household, which many people got around by ordering through friends and relatives. However, after determining that the production capacity for the year would only be some 2.6 million sets, the Mint cut the limit from five to four sets per order and refunded the differences.

Then things really got interesting. After the Mint had sent out order forms for a 1970 Proof set containing a 40% silver half dollar and had accepted checks for the same, the Treasury Department decreed that no 40% silver halves would be struck for circulation in 1970. The only way to get a 1970-dated half dollar would be via the Proof sets and the Mint Sets, guaranteeing excessively large sales of these two items for years to come as the speculators waited for lightning to strike again.

The 1971 Proof sets are remarkable only for the new copper-nickel alloy in the Half Dollars and the fact that the new Eisenhower Dollar being struck for general circulation was not included in the sets, despite it being offered in 40% silver in Proof and Uncirculated conditions. It is understandable that the regular sets had already been pre-sold before the new denomination was approved, but it is absurd that no Dollar was included in the 1972 sets either. Anybody wanting a complete Proof set of either year had to buy the $5 regular set and the $10 40% silver Proof.

1973 saw a copper-nickel Eisenhower Dollar added to the regular Proof set, but as no Dollars were struck for circulation in 1973 the situation was much like that of the 1970 Half Dollars. 1974 was normal again, and then in 1975 and 1976 the Bicentennial Quarter, Half and Dollar replaced the regular coins in the sets for those two years. 1977 and 1978 were normal again, and then came the Susan B. Anthony Dollar.

The 1979 Proof set holders had already been ordered with holes for an Ike-sized Dollar, and so a plastic ring had to be added to support the mini Dollar. A new holder sized for the SBA’s was introduced in 1980, though the coin was struck only for Proof and Mint sets in 1981 and then discontinued.

Once again holders had been ordered in advance, and so a U.S. Mint medal was struck to fill the void in the holder. This is the only regular issue U.S. Proof set to contain anything other than a coin in it, though a 1993 American Eagle gold proof set was issued with a silver medal commemorating the 200th anniversary of the opening of the Mint.

Things have been fairly calm since 1982, the only set of note being the 1990 set struck without a mint mark on the cent. This repeated an error which occurred in 1968, 1970, 1975 and 1983 on the Dime and in 1971 on the Five Cents, an engraving error supposedly prevented from ever happening again after 1983 by the Mint mark being added to the hubs used to make Proof dies. Nobody has ever explained how this omission occurred.

The S-less Cents were even packaged in two different kinds of sets, the regular issue set and the Prestige set which also included a silver Eisenhower’s 100th birthday commemorative. Prestige sets combining regular issue designs with commemorative designs had been invented in 1983 as an additional outlet for the 1984 Olympic silver Dollars, and they have issued in each year since where there were commemorative Half Dollars and/or Silver Dollars. We find that they make great gift items.

Another interesting innovation has been the silver Proof sets created in 1992, in which the Dime, Quarter and Half Dollar are made of 90% silver as was last done on the 1964 Kennedy set. Alas, the results have been vastly underwhelming compared to the 1964 sets, and after a year and a half I believe that we still have five sets out of our original order of ten. This is a program which should be discontinued, if bureaucratic inertia can be overcome.

The Mint has shown itself to be open to suggestion, and is finally offering sets of the current year in March instead of in July or later. I would like to think that I have had some small part in this change, as I have been telling U.S. Mint officials at ANA conventions for years that the sets make great birthday presents, and that people have birthdays earlier that July.

Republished with Permission Harlan J Berk

2010 was an outstanding year for gold, with strong demand across all sectors, the World Gold Council said today. Gold demand for the year reached a ten year high with annual demand of 3,812.2 tonnes worth approximately US$150 billion. On 9 November 2010, this demand led to a new record gold price of US$1,421.0/oz on the London PM fix.

The Gold Demand Trends report sets out the key factors that drove gold demand in 2010, together with an outlook for 2011:

· The jewellery sector enjoyed a strong recovery in 2010, with annual demand 17% higher than in 2009. Asian consumers drove jewellery demand, particularly in China and India. Chinese demand is expected to continue to increase rapidly during 2011 as economic growth in China remains strong, while Indian gold jewellery demand is likely to remain resilient and grow.

· Asian consumers led demand with the revival of the Indian market and strong momentum in Chinese gold demand, which together constituted 51% of total jewellery and investment demand during the year.

· A structural shift in central bank policy towards gold meant that in 2010 central banks became net buyers of gold for the first time in 21 years, removing a significant source of supply to the market.

· Investment demand was down 2% compared with 2009, but was the second highest year on record at 1,333 tonnes, which equated to US$52 billion. Investment demand for gold as a foundation asset in portfolios is likely to remain strong, fuelled by ongoing uncertainty surrounding global economic recovery and fiscal imbalances, as well as fear of impending inflationary pressures and currency tensions.

Marcus Grubb, Managing Director, Investment at the World Gold Council commented:

“As anticipated, 2010 was a great year for gold with demand strong across all sectors. The opening weeks of this year have been characterised by an East/West divide. The dip in the gold price in January resulted in a reduction of ETF tonnage and a decline in the net speculative long position on COMEX. This has been counterbalanced by very substantial physical demand flows in Asian markets.”

The shift in central bank activity was the result of two distinct market forces. Emerging market economies, experiencing rapid growth, have been large buyers of gold to diversify their external reserves. Meanwhile, European central banks have virtually stopped sales in the wake of the financial and European sovereign debt crises. Today’s Gold Demand Trends report examines the impact of this development on the gold market in more detail.

George Milling-Stanley, Managing Director, Government Affairs at the World Gold Council commented:

“Emerging country banks are likely to continue purchasing gold as a means of preserving national wealth and promoting greater financial market stability. Any gold sales from advanced economies are unlikely to be significant as the official sector remains highly risk-averse. Collectively, the official sector is still a significant holder of gold. Central banks remain committed to its importance and relevance in maintaining stability and confidence as they have been for hundreds of years.”

Gold Demand Statistics for full year 2010

· Gold demand in 2010 reached a 10 year high of 3,812.2 tonnes. Demand was up 9% year-on-year, and marginally above the previous peak of 2008 despite a 40% increase in the annual average price level between 2008 and 2010. In value terms, total annual gold demand surged 38% to a record of US$150 billion.

· Jewellery demand was remarkably robust in the face of record prices in the majority of currencies. Annual demand for gold jewellery rose 17% from 1760.3 tonnes in 2009 to 2059.6 tonnes. The rise in annual average prices over the same period was 26%. In value terms, this resulted in record annual jewellery demand of US$81 billion.

· Investment demand, comprising bar and coin demand, ETFs and similar products, but excluding OTC investment demand, remained stable in 2010, down just 2% from the exceptional levels seen in 2009. This equated to a 23% rise in value terms from US$43 billion in 2009 to US$52 billion in 2010. Physical bar demand was particularly strong during the year, recording an annual gain of 56% at 713.2 tonnes.

· Demand for gold ETFs and similar products totalled 338.0 tonnes during 2010 or 9% of total demand. Although this was 45% below the 2009 peak of 617.1 tonnes, it was nevertheless the second highest annual figure on record. As at the end of 2010, total gold holdings in ETFs and similar products stood at 2,175 tonnes with a US$ value of $96 billion.

· Demand for gold used in technology was 419.6 tonnes, 12.4% higher than in 2009 as the electronics segment fuelled recovery in the sector, with demand returning to long-term trend levels. Demand soared by 41% year-on-year in US$ terms to a record US$17 billion.

· India was the strongest growth market in 2010. Total annual consumer demand of 963.1 tonnes registered growth of 66% relative to 2009, which was largely driven by the jewellery sector. In value terms this was worth US$38 billion.

· China was the strongest market for investment demand growth. Annual demand for small bars and coins increased by 70% year-on-year, totalling 179.9 tonnes, which is worth approximately US$7 billion.

· Total supply is estimated to have increased marginally, 2% higher year-on-year for the full year 2010, with a number of new projects across a range of countries and regions contributing to higher levels of mine supply. Within total supply, recycled gold, which accounts for 40%, fell 1% compared with the previous year to 1,653 tonnes.

The full year 2010 Gold Demand Trends report, which includes comprehensive data, can be viewed at: www.gold.org/media/