by Louis Golino for CoinWeek ………

Over the weekend we learned that the EU was giving the small country of Cyprus, with an economy smaller than that of any U.S. state, a bailout of 10 billion euros, or 13 billion dollars. Then we found out that based on an initial plan by European authorities that holders of bank accounts could lose up to 10% of their bank deposits to pay for the EU bank bailout through a bank deposit levy.

According to accounts on March 18 in Market Watch (www.marketwatch.com), those with under 100K euros would pay 3%, those with 100-500K in euros would pay 10%, and those with over half a million would pay 15%. The details were expected to be worked out later in the week, and banks in Cyprus will remain closed until Thursday to help prevent a bank run.

Cyprus is a kind of mini-Switzerland or Cayman Islands because it is a banking haven, and some of its largest depositors are foreigners, including large numbers of Russians and
reportedly, Russian organized crime members. Cyprus is also unusual because its banking sector is eight times the size of the economy, which is not the case in other European countries.

Germans and other well-off Europeans clearly did not want to bailout the Russian mafia, and other non-European depositors, which has a lot to do with the origins of the bank deposit levy.

Over the course of the day on March 18 most international markets seemed to largely take these developments in stride, and gold saw its first decent bounce in weeks, moving up about $15 for the day.

By the end of the day, the initial plans were beginning to change. The Euro Group issued a statement indicating that those with under 100,000 euros in bank accounts should be protected, though there is no guarantee of that happening, even though Cyprus actually has an FDIC-type guarantee on smaller deposits up to 100,000 euros.

Some people see the beginning of the end for the euro and even the European Union in these dramatic events, but we have learned over the last few years that it is wise not to count the Europeans out. To be sure, the EU economy remains mired in deep recession with very high unemployment levels. But the consensus over the last couple years is that the euro would disappear, and so far it is still worth 30% more than the dollar, which is a big part of why the EU economy is not doing well since the EU is an exporting economy.

UPDATE: On March 19, following strong pushback from Cypriot politicians and the public, and Russian government authorities, the Cypriot parliament rejected the bank levy plan. That leaves the situation in limbo, as a bank ran may now be averted, but Cypriot banks could still collapse without funding from the EU.

For some the events in Cyprus could point to what may happen elsewhere in Europe, or even possibly here in the U.S. But each country has its own problems, and we will see whether Cyprus turns out to be some sort of banking or economic domino, portending more trouble down the line in other countries.

However the Cyprus bank crisis ends up playing out, these developments are forcing many people to think hard about how they protect their assets. Gold and other precious metals are obviously seen as safe havens of choice in such situations, and I would not be surprised to see physical gold premiums rising dramatically in Cyprus in the coming days and weeks, as they did in Greece during the worst moments of that crisis.

As I wrote recently, gold has been in the doldrums in 2013, which experts often see as bullish because when everyone is chasing an asset, it has usually peaked, or may even be approaching bubble status. But when sentiment is negative assets often move up.

The events in Cyprus have at least momentarily helped push gold up a little, and if we really do see something like bank runs, which I am not sure we will, there is little doubt the metal would continue advancing.

The Cypriots and the EU may be able to contain this crisis at least for a while, but the real danger is if something like this were to happen in a larger EU country like Italy that has serious economic problems, and a political class that seems largely unable or unwilling to face these problems, with the exception of outgoing Prime Minister Mario Monti, whose painful economic reforms were helping to get Italy on track.

The outlook for an EU-wide banking union to help support the euro currency also seems substantially diminished now.

In such an environment of ongoing banking crises coupled with long-term economic problems, the European Central Bank is likely to need to continue its version of quantitative easing. Mario Draghi, the Italian who heads the ECB, famously said he would do “whatever it takes” to defend the euro.

The European situation therefore does appear to provide good reasons for owning some gold.

At the same time, as I have argued many times, the world does not need to end for gold to go up in value, and of course if we really did find ourselves in a truly calamitous economic situation, things more practical than gold would probably be more in demand.

My point is that if the European and/or world economic environments deteriorate, investors are likely to seek haven in precious metals. But if instead we continue a slow but steady progression towards economic normalcy, as we appear to be in the U.S., precious metals will still be a useful asset class, as inflation rises due to improved economic activity.

Finally, for those who are more sophisticated investors than the average person, it is also useful to bear in mind that gold prices in currencies other than the U.S. dollar has done much better than gold in dollar terms, even this year. This is a point that Dennis Gartman, long-time commodities trader and author of the Gartman Letter, makes frequently.

Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.

By Jeff Starck-Coin World Staff | 03-16-13
Article first published in March 25, 2013, World Coins section of Coin World

The Mint of Poland has released a cylindrical coin with a design on its edge honoring the Roman god Mercury.

GOLD ticked higher but silver prices stalled Friday morning, as a rise in Asian stock markets failed to carry over into European or pre-opening trade in US equities.

The Euro currency rose sharply through $1.30, knocking the gold price in Euros back below €1220 per ounce, virtually unchanged for the week.

Sterling gold prices slipped to £1050, some 2.3% below Tuesday’s new 4-month high.

For Dollar investors, Friday morning’s London Gold Fix came in at $1593.25 per ounce – more than $6 above yesterday afternoon’s level and the highest AM fixing in more than two weeks.

Silver achieved only a 2-day high at its London Fix on Friday, set at $28.91 per ounce.

“Given what we have seen in Libor [the interbank lending rate], we’d be foolish to assume that other benchmarks aren’t venues that deserve review,” said Bart Chilton of US regulator the Commodity Futures Trading Commission in an email Thursday, clarifying reports that the London Fix is under investigation by US derivatives regulators.

The CFTC has not begun an investigation, but is “discussing internally” whether the global benchmark for valuing and pricing gold – a snapshot taken at 10:30am and 3pm for gold, and at midday for silver – may be open to “manipulation”, along with “energy, swaps…and the whole litany of ‘bors,” as Chilton said in testimony more than 2 weeks ago.

Back in today’s markets, “Gold prices are not being supported by the current confluence of events,” says French investment bank and bullion dealer Natixis in its latest weekly comment.

“[The] stronger Dollar predicated upon fiscal retrenchment suggests further downward pressure upon gold prices, while any move by the Fed to scale back QE3 in response to a pick-up in growth…also represents a downside risk for gold prices.”

Consumer price inflation in the US rose to 2.0% annually in Feb, new data showed today, with gasoline prices rising at the fastest pace since 2009.

“Inflation is still contained, but there’s a fear that it’s starting to rebound,” Bloomberg quotes Hideo Shimomura, chief fund investor for $63 billion in assets at Mitsubishi UFJ in Tokyo.

“Treasury yields at 2.0% show people expect improvement in the economy.”

Money markets are now pricing in 2.6% inflation, the newswire adds, the highest level of inflation expectations since September.

“The American economic revival, diverging monetary policy expectations and the unfinished Euro area crisis…all point in the same direction,” says a note from SocGen analyst Sebastien Galy – “a stronger Dollar.”

“Gold’s fate will largely ride on what direction US equity markets will take,” counters Thursday night’s note from INTL FCStone, saying that “only a sizable correction in US equities will likely prompt funds to get back into gold.”

Noting that silver investment has risen while ETF trust fund holdings in gold fell, “We find this divergence surprising given that silver investment demand tends to be closely linked to sentiment towards gold,” says Anne-Laure Tremblay, precious metals strategist at BNP Paribas.

Trimming her silver price forecast from a 2013 average of more than $34 per ounce to $31.35, “A reversal in trend is likely in the next two months if our forecast for a subdued gold price performance [also] proves correct.”

Adrian Ash

by Louis Golino for CoinWeek ………

Update on U.S. Mint Price Increases

On March 5 the U.S. Mint’s Michael White, who serves in the Mint’s Office of Public Affairs, provided some clarification regarding the issues discussed in my last column , which concerned the recent increase in premiums on gold and platinum numismatic coins at a time of declining precious metal prices.

He noted that non-metal costs at the Mint, such as labor and other costs, have indeed been rising recently, and that they played a role in the price increases. Additional details on which specific costs have risen will be provided later.

In addition, “weaker consumer demand,” as a result of “discretionary budgets being squeezed,” mean the Mint is selling fewer units of its precious metal products.

Perhaps most importantly, Mr. White explained that the Mint “generally reprices coins so that the entire portfolio recovers its cost,” and added that they need “some margin to cushion against volatility” in precious metal prices.

Looking forward, he said that Mint officials hope they can keep price increases to a minimum.

For those readers and collectors who have speculated that the Mint is seeking to model itself or its pricing structure on certain foreign mints that charge very high premiums over melt value, as I discussed last time, Mr. White confirmed that the Mint has no plans to do anything like that.

Besides, its silver numismatic coins are still priced competitively compared to those of most foreign mints. For example, even at $245, which is the expected price of the 2013 uncirculated versions of the five-ounce silver America the Beautiful coins, the U.S. Mint’s prices will be roughly half those of the Perth and Canadian mint’s five ounce silver coins, which generally sell for around $500, although that is sometimes for proof or reverse proof coins that have slightly higher production costs and in the case of Canadian coins, often includes attractive wood display cases.

As far as the impact of the U.S. Mint’s new prices, particularly on gold and platinum coins, on sales levels, it is really too soon to say. In addition, at the moment the only gold coins available are the First Spouse coins, and the only platinum coin is the 2012 American platinum eagle.

The most recent sales report from the Mint, which was released on March 5, mainly reflects increased sales for the spouse coins, as buyers sought to purchase their coins before the implementation of the new, higher prices last Wednesday, February 27. We will have to see what happens in the coming weeks and months before it is clear whether the higher prices are dampening overall sales.

Girl Scouts of the USA silver dollars

Last week the Mint also began taking orders for the Girl Scouts of the USA centennial commemorative silver dollars. Sales for the first week came in at about 11% of the total maximum authorized mintage of 350,000 coins, including 29,331 proof and 12,293 uncirculated coins sold during that period. Those figures are comparable to opening sales for last year’s Infantry silver dollars.

Unless a lot of non-collectors, such as girl scouts and former girl scouts, purchase the coin, sales for the GSUSA coin may run on the low side, though it is too soon to say for sure. That is because coin collecting is still a male-dominated field, even if that is changing, and as I have discussed before, some male modern coin collectors have less than enlightened views on women. They say, for example, that Girl Scouts got their coin already because they were included on the 2010 Boy Scouts centennial silver dollar, a reference to the inclusion of a female Venturer on the coin,
which many collectors continue to view as a politically correct move. I have also read many online comments from collectors who describe the coins as ugly or even repulsive, which is really a beyond-the-pale kind of view that is unfortunately too common. I respect peoples’ right to their own views, but seriously, is “repulsive” a word one would use to describe the coin?

Plus, as I explained last year, the history of the two organizations is deeply intertwined, and besides, if it is appropriate to celebrate the 100th anniversary of the Boy Scouts, why not the 100th anniversary of the Girl Scouts? Is that really political correctness, as many male collectors claim, or rather, is it not an appropriate way to honor the tens of millions of American women and girls who are current or former Girl Scouts?

In addition, as the CEO of the GSUSA, Anna Chavez, explained in my interview with her last year , Girl Scouts are natural collectors, and many of them are interested in numismatics, so they may end up purchasing lots of the coins.

American palladium eagle study

In other news regarding the U.S. Mint, the long-awaited report from Mint on the feasibility of minting American palladium eagles is due to be delivered this week to the Senate Banking Committee and the House Committee on Financial Services.

The coins were authorized with the American Palladium Eagle Bullion Coin Act of 2010 (Public Law 111-303), but in order for the coins to be issued, the Mint has to first demonstrate that there is sufficient demand for the coins. From my own communications with fellow collectors, I have little doubt that the coins will be very popular and will sell well.

The Mint contracted the CPM Group to prepare the feasibility study, which the Mint received last year. After reviewing and analyzing those results, the Mint prepared the final report, which is the one being delivered to the Congress this week. I will try to obtain a copy of the study and will report on its findings.

If the study provides support for issuance of the bullion coin, it has to be minted within twelve months of the issuance of the report. Only a bullion version is required by law. At its discretion the Mint may issue a proof version for collectors. The legislation also has an unusual provision that states that if collector versions are issued, each year’s coin is supposed to have “a materially different finish” from the previous year’s coin. But there are only so many finishes available, so it will be interesting to see how that works out, if the coins are issued for a number of years.

America the Beautiful Five-Ounce Silver Coins delayed

Collectors of these coins have been eagerly awaiting information on the release of the 2013 coins.

Their release had been expected to begin earlier in the year, but they were delayed, and product release dates were removed from the Mint’s web site.

I contacted the Mint and was told that the reason is that the Mint is still in the process of determining mintage levels for both the uncirculated collector versions and the bullion coins.

Last year’s collector versions have been selling out one after another in recent weeks, and at the moment only the Chaco Culture and El Yunque coins remain available for sale, and the latter coin has been backordered, which is generally a sign that the coin is close to selling out.

The Hawaiian Volcanoes coin sold out unexpectedly, and quickly tripled in price to $600 on the secondary market. The other sold-out coins quickly reached the $400 level. Approximately 15,000 of each of the 2012 coins appear to have been minted, which is lower than any previous year’s coins.

Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.

By Jeff Starck | 03-04-13
Article first published in March 18, 2013, World Coins section of Coin World

Designs for some coins, like the gold €100 piece honoring the Sistine Madonna, will require a new portrait and legend after the new pope is elected. Graphics seen here are the designs as proposed before the resignation was announced.

by Louis Golino for CoinWeek ………

Last year the U.S. Mint saw its numismatic revenue decline by a third as a result of declining sales of gold and platinum coins due to higher underlying precious metal prices and strained collector budgets because of a still-struggling U.S. economy. Silver coins, on the other hand, continued to be profitable for the Mint, and their sales increased.

But rather than try to reverse the trend in gold and platinum coin sales by keeping prices as competitive as possible, which is what most market analysts for any business would suggest, the Mint has raised premiums on all of its precious metal products at a time of declining precious metal prices, virtually ensuring that numismatic revenues decline further unless an enormous amount of very well-heeled buyers comes to the rescue, possibly in hopes of making profits on temporarily low mintage coins.

Earlier this year, as I discussed previously , the Mint announced new, higher prices on some of its silver-based coins, including the 5 ounce America the Beautiful coins, and American silver eagles in proof and uncirculated finishes. Because those increases were announced as silver prices were declining, I asked the Mint about it, and their response, which was included in my article, essentially argued that the Mint needed to retain the ability to adjust prices “to reflect the changing price of silver,” which is a curious argument when silver prices were declining.

To be sure, there are certainly plenty of non-metal costs involved in the production of collector coins such as labor, machinery, etc. If the Mint had pointed to some of those in its response, it would have been easier to understand the rationale for the increases.

As of Feb. 27 the Mint has gone ahead and implemented a new pricing grid for gold and platinum coins that was published in the Federal Register on February 20 , which raises premiums just as gold and platinum prices have been declining markedly in recent weeks.

Some people say they were trying to get ahead of the curve and expect higher metal prices soon, as many experts do, because of the view that precious metal prices have bottomed out, as sellers reached what is known as capitulation.

But that really misses the point, as the whole point of the grid is to establish fixed premiums at different metal price intervals, so the new grid has nothing to do with expectations of higher metal prices down the road.

The one saving grace of the new grid, and this is something I brought to the Mint’s attention in my inquiries, is that now when platinum prices are increased or decreased, it will be in $50 increments, as is used for gold, not $100 increments as was the case previously.

But if one considers, for example, the 2012 American platinum eagle, which contains one ounce of the white metal, the peculiarity of the new pricing mechanism is abundantly clear. Platinum prices recently declined below the $1600 level, hitting $1575 on February 28, but the platinum eagle coin price was raised to $2,000 the day before.

Those are proof coins and clearly some premium over melt value is understandable, but sales of last year’s coin were already running well below those of prior years. And raising the premium to $400 over melt value hardly seems like a recipe for increasing sales.

So one must ask what is the Mint’s strategy here? Since no one outside the Mint knows for sure, it is hard to say, but a number of possibilities come to mind.

The Mint could well be trying to make up for lost revenue by increasing its profit margins on the numismatic coins it sells with higher premiums over melt value. But, first, those margins are already quite healthy, especially for silver coins, and raising them beyond a certain point seems almost certain to force many buyers to stop buying, reduce their purchases, and quite possibly turn to other areas of numismatics where they may find better opportunity.

In fact, Royal Scandinavian Mint owner Ola Borgejordet told me today that the Spanish Mint on Feb. 20 announced it was lowering prices on its gold coins in response to lower gold prices, after having increased them in September.

He also added that one needs to bear in mind the other costs of producing coins such as “tool making, the production and preparation of blanks, etc., which could very well have increased. If the U.S. Mint’s reasoning for the increase is the price of precious metals, then this seems odd.”

Again, since the Mint has not made clear the specific rationale for the substantial new premium increases, it is hard to understand what is going on.

The Mint has many times explained that the price grids for precious metal coins were intended to give the Mint flexibility in pricing these coins, and that such a system was better suited to the pricing of numismatic coins than the system used by bullion dealers for their products, which constantly adjusts as metal prices ebb and flow.

It is important to consider also that last year, as I have discussed several times recently in this column, many new mintage lows were reached across a variety of silver and gold product options such as the American gold eagle uncirculated coin, the individual proof gold eagles, and the 5 ounce silver uncirculated coins, which have been selling out in the past few weeks and garnering substantial premiums in the secondary market.

Many experts predict that higher premiums, even when metal prices are down, are likely to further squeeze collectors who simply cannot afford to keep up with all the series they used to collect. One frequently reads online comments from collectors who say they are paring down their purchases as prices rise, and I am doing this myself.

Some people speculate that the Mint is perhaps adopting the approach of many foreign mints that price their collectible precious metal coins way above the melt value of the coins, with the Royal Mint in the UK probably being the best example of that. The Royal Canadian Mint and Perth Mint in Australia also do that though not quite to the same extent.

The idea behind this seems to be that there is a core of collectors and buyers who will pay almost any price to keep their sets updated, or perhaps to speculate and try to make a profit. And the lower mintages would go hand in hand with that approach, which is what foreign mints do to stir up demand.

But that would go against the stated objectives of the U.S. Mint to make its numismatic coins available to a wide audience at the lowest price possible, while still making a profit that is used to help fund other programs of the Mint and to reduce the deficit. Many people forget that numismatic coins are never produced with taxpayer funds.

Moreover, it is evident that the high price/low mintage approach to selling numismatic coins has its limits. The Perth and Royal Mint have both experienced revenue declines in recent years in their numismatic programs, though the Canadian experience has been different. The RCM in the past couple years has vastly lowered the mintages on many of its coins, while issuing a very strong and innovative line of products at different price points. That is partly true of the other two mints as well, but in my view not quite to the same extent. Examples include the 2012 glow-in-the dark dinosaur coin and some of the Titanic releases from the RCM that were inexpensive and achieved quick sell-outs and high secondary market prices. Meanwhile, a lot of Perth and Royal Mint coins have seen their values decline recently.

Like many collectors I was disappointed by the Mint’s recent actions, and I welcome any clarification Mint officials can provide for their rationale. Eventually, if too few people can afford to keep buying the Mint’s precious metal products, especially the higher-priced items, it will no longer be cost effective to even produce them. If not reversed, such trends could ultimately drive collectors away from modern U.S. coins and accelerate the increased interest among U.S. collectors in modern foreign coins, some of which offer great value at relatively little cost over melt value, like the coins of Mexico.

Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.

By Doug Winter - RareGoldcoins.com
CoinWeek Content Partner ………

You see a $25,000 coin in a dealer’s inventory and you really want it. The problem is you are short of funds and you are the sort of person who

made a promise to never take on debt to finance his hobby. Do you pass on the coin? 

Maybe you don’t have to. My guess is that if you are a long-time collector you have at least $25,000 worth of coins in your collection that range from” junk” to” stuff” to “I kind of like this but it really doesn’t fit into my collection anymore.” I’d like to suggest that you can obtain that $25,000 coin by trading miscellaneous coins with the dealer in order to achieve your goal. And if you do the trade the right way, the best possible thing happens: a scenario in which both you and the dealer are happy and walk away thinking “I liked that trade and I’d do it again.”

Some dealers don’t like to trade and the advice which I give in this article will be for naught. Others–myself included–like to trade, especially if they have the opportunity to shed some older inventory and bring in some interesting new coins without the effort of going to a show.

A trade is mostly likely going to work if you know the dealer already and the dealer knows you. I have a few clients who, it seems, would almost always rather work out a trade than write me a check for a coin and I am happy to oblige them. They understand the dynamics of trading.

In a nutshell, trades only work if both parties feel they are getting good value. I am less likely to trade a great new coin that I just added to my website than one which has been in stock for a few weeks (or months) . Conversely, collectors want to trade for coins which will improve their collections. They are sophisticated enough to understand that not every great coin owned by a specific dealer sells quickly (that’s a topic which deserves a blog…) and ultimately they want a collection that contains more neat coins and less “stuff.”

The inherent problem with many coin trades is that collectors want one really good coin from a dealer but are not willing to give up anything in return. It’s the numismatic equivalent of a baseball trade in which one team is offering a proven star player while the other team offers either unproven young prospects or overpaid, over-the-hill players on their roster. Some sort of compromise has to be made by both parties for a trade to work.

When someone proposes a trade with me, I immediately have to categorize what is being offered by the other party. Some trades are incredibly easy. I have a $10,000 Dahlonega half eagle in stock and my potential trading partner has two $5,000 Dahlonega half eagles. Those kind of deals are a piece of cake and get done very easily.

But trades are usually more complicated than that.

Let’s look at the categories in which potential trade coins can fall into. I’ll make a few pertinent comments about each.

1. Coins Purchased From Me Recently

In theory, the coins I should want most are the ones which he has recently sold, right? Actually this is often not the case and the reasons why are not often so obvious. Let’s say I had a reasonably memorable coin in stock a few months ago and it comes back in a trade. My worry is that potential customers will recognize it and wonder “hey, there’s that MS63 Charlotte quarter eagle…what’s it doing back in Doug’s stock?” In the case of really obvious coins, this is something that might keep me from getting a trade done.

How do I value coins that I sold within, say, the last year which are being offered back to me in trade? I generally work on a 10-15% margin (sometimes less) so if I sold a coin for $5,000, it is likely that my cost was $4,250-4,500. I’m going to want to take that coin back at my original cost so that when I re-offer I can price it once more at around $5,000.

Some dealers do something disingenuous when it comes to taking coins back in trade. Let’s say they sold a coin for $5,000 and their cost was $4,500. They will offer to take the coin back at $5,000 (which is technically a $500 loss for them) and make this up on the sell side where they will quietly jack-up the price of another coin from $5,000 to $5,500.

The bottom line is if you use a recently purchased coin as part of a trade, you can expect to get around 80-90% of what you paid for it but only if you are trading it back to the dealer from who you purchased it. If the coin is not from me, I don’t feel the obligation to do this.

2. Coins Purchased From Me a Number of Years Ago

What if I get offered a group of coins which I sold back in 2003? The chances are good that the owner is going to be in a profit position but how much of one can become a grey area. Before I get into that, let me tell you how I’d figure them, value-wise.

Typically, if these are “cut and dry” sorts of coins (say like a common date Dahlonega half eagle in PCGS AU55) I’m going to see what the last few auction trades were and offer somewhere in the middle of the range. In other words, if the last three trades were $3,000, $3,300 and $3,600 I am going to figure the coin at around $3,300.

Let’s say I get in a bunch of coins in trade and they are in older holders with a possible chance to upgrade. What do you I then? To me, the ethical thing to do in this situation is to let the collector know that there is possibly some extra value in the coins. I might tell him, “I am going to crack this coin out to regrade it. I’ll figure it in the trade at $3,300 regardless of what happens but if it upgrades, I will pay you more.”

If a dealer sells nice coins, he should be happy to get back a group which he sold years ago and this would be an ideal scenario for a trade.

3. Coins I Don’t Specialize in But Which I Like

As a dealer who specializes in rare United States gold coins from the 18th and 19th century, these are obviously the sort of coin that would interest me most in a trade. But I wouldn’t rule out coins that I don’t typically deal in. For me to accept non-gold coins in a trade, they have to be either something that I find interesting enough that I would put them on my website (and hope that it sells) or something that I think would sell for a price close to (or over) what I paid for them if I wholesaled them or put them into an auction.

I recently traded a high quality early gold coin for a group of coins which I don’t deal in but found interesting. The main reason I made the trade, however, was because I think the collector who proposed the trade has an excellent eye and he understands value very well. I might not have made the exact same trade if it was proposed by someone who I didn’t respect ability-wise. But this was a guy who impresses me and I was happy with the coins I received.

There is a limit to what I will take in trade. As an example, a few months ago, someone proposed a trade in which I would ship him a very cool Proof gold coin in exchange for what seemed to be some good quality Buffalo Nickels and Lincoln Cents. Even though it seemed like a reasonably fair trade, I passed. I don’t know the Buffalo Nickel and Lincoln Cent markets very well; certainly not well enough to start taking in $5,000 examples in NGC holders. I suggested that he offer these coins to a specialist who would be more interested in them than I would and then use the proceeds to buy my coin.

4. Coins I Don’t Deal in And Don’t Like

Never say never, as the cliche goes, but it is going to be hard me to take in a bunch of off-quality coins that I don’t like and I don’t specialize in order to make a trade. I guess if I had a few complete duds in stock which I hated and I was desperate to get out of them…the good news, for me, is that I infrequently purchase disastrous coins and when I do, I tend to wash my hands of them as quickly and painlessly as possible by throwing them into auction and washing my hands of them.

Ready for a brief aside?

There is a well-known but frequently cash-strapped dealer who is (in)famous for trading coins. He is the worst trader that I have ever seen and I know a few dealers (myself included) who have totally gotten the better of him when we make trades. My strategy was to take the oldest, most expensive retreads in my inventory (always gold coins) and trade them for lower priced, reasonably fresh non-gold coins which he owned. He always botched trades by taking in high priced coins at too high a price (I was always able to steer him towards the coins I owned that were the worst values) and exchanging them for less expensive, far more liquid coins.

5. Bullion

I don’t deal in bullion but I stayed at a Holiday Inn last night and can offer a fair trade price for bullion, knowing that I can lay it off at those numbers or even a small profit. Most dealers are happy to take bullion in trade. I suggest that if you offer bullion, you call a few national dealers and get an idea of what they are paying. I should be allowed to make a small amount on your bullion but I should not be allowed to make 10 or 15%. Don’t undervalue or overvalue your bullion!

6. Modern Crap AKA Your Boxes Full of Junque

This is where most collectors have the greatest amount of unrealized potential trade value in their collections. Let me give you an example.

I have been working with a collector for a few years who is trying to pare down his holdings. He wants to own a small number of really good coins but his business is cash intensive and he doesn’t always have the available funds to buy good items as they become available. I went to his house a few months ago and he had pulled out literally hundreds of proof sets, rolls of silver coins, sets of low grade pieces and miscellaneous “stuff.”

This isn’t the sort of material I typically deal in but I like this guy, we’ve done a lot of business and I had the feeling that his junk was going to add up to a decent chunk of change. By the time I got his coins home, sorted through them, sent the good coins to PCGS and NGC and taken pen to paper, we were up to close to $75,000. That’s a lot of “junk” and that, in turn, bought him a few really good coins which he now has stored in one small box instead of in three huge safety deposit boxes.

As a dealer, this isn’t the sort of deal I like to do. It is very labor intensive and I still have nightmares about washing my hands every three minutes as I sortd through bag after bag of circulated Indian Cents and Mercury Dimes looking for key dates. But I was working on 10% and got the collector to promise that I would be able to trade for his good coins when the time came.

Most times I’m not going to trade, say, a Proof Liberty Head double eagle worth $75,000 for a trunk full of modern crap. But if you are a good client and you do most of the work (i.e, you ship me your stuff neatly packaged and reasonably well-organized) I will consider trading my one great coin for your boatload o’ crap.

I’ve probably made the whole trading process seem more complicated than it really is. If you don’t have two compatible trade partners, you’ll probably never make a deal work.

I’d love to hear your stories about good trades and bad trades. Please comment on them at the end of this article. And if you have coins which you would lke to trade, please feel free to email me at dwn@ont.com