Increase in Panda Production

Jul 1, 2011 | bullion, foreign, gold, silver

The People’s Bank, which governs the creation of coins in China, has announced that because the Panda coins are so popular they will be increasing production. In December, I wrote that the People’s Bank was plannning on a 10-fold increase in production. However, the recent announcement shows a somewhat smaller increase.

The largest increase will be in the 1⁄10 ounce and 1⁄20 ounce gold Pandas with a 4-fold increase. Silver 1 ounce Panda coins will double from last year. Mintages are being reported as follows:

2011 Pandas 2010 Mintage New Mintage
1 ounce Gold 300,000 500,000
½ ounce Gold 120,000 200,000
¼ ounce Gold 120,000 200,000
1⁄10 ounce Gold 120,000 600,000
1⁄20 ounce Gold 120,000 600,000
1 ounce Silver 3,000,000 6,000,000

In some forums, it has been suggested that this increase would mark the fourth generation of the silver Panda coins. One source described the generations as:

Generation Weight Content Size
First Silver Panda Coins (1983-1985) 27g .900 fine 38.6 mm
Sterling Silver Panda (1987)
one year issue		 1 troy oz .925 fine 40 mm
Second Generation (1988-1999) 1 troy oz .999 fine 40 mm
Third Generation (2000-2010)
Change in artists		 1 troy oz .999 fine 40 mm
Fourth Generation
Increased Production		 1 troy oz .999 fine 40 mm

Some have called silver the investment vehicle for the masses. Silver has a silky color that allows for striking designs to be very visible. Because silver is less dense than gold, a one ounce coin made from silver is larger than a one ounce gold coin. This means there is a larger surface area for beautiful designs, like the silver Panda.

Silver Panda coin image and production data courtesy of CGCI

Silver Is Beautiful

Dec 28, 2010 | bullion, foreign, silver

Some have called silver the investment vehicle for the masses. Even with the price rises, silver remains more affordable than gold and is more accessible than gold. Looking at the U.S. Mint product line, the consumer has more silver options than gold. At some point, the U.S. Mint will actually sell the American the Beautiful silver bullion coins that seems to have garnered a lot of attention.

Silver has a long history as being the most popular metals for coins. From Ancient Rome to the Spanish Pillar Dollars that became the basis of United States currency, silver has been the plentiful and desirable metal used for coinage. Once silver became the base metal of choice, the United States spent over 100 years manipulating the composition of coins and silver prices in an effort to support silver mining concerns of favored members of congress.

I like silver coins. Silver has a silky color that allows for striking designs to be very visible. Because silver is less dense than gold, a one ounce coin made from silver are larger than gold. For example, most gold bullion coins are around 28 mm while silver coins average 38-40 mm (the Canadian Maple Leaf is 38 mm). It translates to more surface area for beautiful designs.

I collect a few silver bullion coins. Aside from the American Silver Eagle in proof and bullion versions, I also collect Canadian Maple Leafs, British Britannias, and China Silver Pandas. Silver Pandas are very interesting. China has been minting the Panda Bullion coin since 1983. The obverse features a panda in various images in its environment. Every year (except 2002) features a different panda image depicted in its natural environment. The reverse is The Hall of Prayer for Abundant Harvests in the Temple of Heaven. There have been four versions of this design (1983-1991, 1992-1999, 2000, 2001-present).

There have been three generations of Pandas and a single “different” issue. Generations are based on content and changes in design. The claim is that 2010 is the last year of the current generation since there may be a slight change in the works along with a significant increase in production. The People’s Bank, which governs the creation of coins in China, is planning for a 10-fold increase in production. It is conjectured that since the price of silver is so high that the premium they charge because of the popular designs can bring in more revenue. It is uncertain whether this will be a successful strategy because those who studied microeconomics will tell you that an increased supply without an increased demand will push the prices downward. The U.S. Mint discovered this a few years ago and reduced the number of products offered.

With the new information, one source, the generations have been described as:

Generation Weight Content Size
First Silver Panda Coins (1983-1985) 27g .900 fine 38.6 mm
Sterling Silver Panda (1987)
one year issue		 1 troy oz .925 fine 40 mm
Second Generation (1988-1999) 1 troy oz .999 fine 40 mm
Third Generation (2000-2010)
Change in artists		 1 troy oz .999 fine 40 mm
Fourth Generation Projected for 2011: 10x increased production

Recently, I picked up the 2010 Panda to keep my Third Generation collection complete. The Third Generation Panda designs are distinctive in being more realistic than previous designs with fine details as part of the design. Gone are the cartoon-like panda figures allowing this generation of panda designs to appeal to a wider audience. These are wonderful designs and something that shows off very well on the 40 mm silver planchet.

Soda, Chips, Candy Bar, Gold?

Dec 20, 2010 | bullion, gold, video


Town Center Mall in Boca Raton, Florida is not a run-of-the-mill shopping plaza. With upscale stores like Neiman Marcus, Bloomindale’s, Nordstrom, and Tiffany and Company, there are plenty of opportunities to overspend this holiday season. Now, you can diversify your portfolio by buying gold… from a vending machine!

PMX Gold LLC, the wholly-owned subsidiary of the mining company PMX Communities Inc. worked with Ex Oriente Lux AG to bring the Gold to go® vending machine to the United States. Installed at the Town Center Mall, the machine will dispense 1 gram, 5 gram, 10 gram, 1 ounce, and 250 gram gold bars from Credit Suisse; 1/10 ounce, 1/4 ounce, and 1 ounce Krugerrands; and 1/10 ounce and 1 ounce American Eagle Gold bullion coins.

Gold is dispensed in a black gift box whose price is based on the current spot price that updates wirelessly every 10 minutes. Customers are guided through their purchases using a touch screen that allows them to select the amount of gold they want to purchase. PMX Gold LLC and Simon Properties, owner of the Town Center Mall, will make money of a commission that ranges between 4 and 15 percent depending on the item’s weight. Currently, the machine only accepts cash, but that may change in the future.

The machine will be guarded by am armed security person and monitored by cameras.

This report was broadcast on WPTV, News Channel 5 in Orlando:

Another video from the Orlando Sentinel:

Gold to Go made news when it installed its first Gold ATM at the Emirates Palace in Abu Dhabi. Currently, there are 11 machines in Germany, one in Spain, Italy, United Arab Emirates, and now the United States. Ex Oriente Lux reports that their machines in Europe take in 250,000 to 300,000 Euros per month.

Thomas Geisslei, CEO of Gold to Go, say that the company wants to install more than 30 machines within the United States in the next year. This way, you can decide whether you want that latte or a gold bar.

Looking Forward at the 2011 Coins

Dec 12, 2010 | bullion, coins, dollar, national park quarters, US Mint

It is difficult to determine if 2010 was a good year for those collecting coins from the U.S. Mint. Unlike 2009, the U.S. Mint was able to strike both bullion and proof American Silver Eagle and American Gold Eagle coins. After the outrage of 2009, collectors appear to be happy that the proof Eagles have made a return.

Also new in 2010 were the American the Beautiful Quarters program with designs representing the first five national parks created by an act of congress. As part of each park’s introduction, either Director Edmund Moy or Associate Director Andy Brunhart has visited each of the 2010 celebrated sites for the introduction of the new quarters. Although it has been difficult finding these quarters in pocket change, these new coins had nice designs and was a chance for people to learn about the United State’s wonderful national parks.

Bullion
Bullion programs have caused angst amongst collectors and the U.S. Mint. Collectors found their collections with holes for the 2009 American Eagle Proof coins while waiting close to the end of 2010 to find out that proof Eagles will be produced.

Sales of bullion American Eagles have had mixed results. While the U.S. Mint has not produced bullion Platinum Eagles since 2008, sale of gold bullion has dropped from 2009. With the price of gold climbing from $1,100 at the beginning of the year to over $1,300 since September, investors may be looking for more cost effective investment option.

One investment option has been silver. With over 33 million silver Eagles produced through the first week of December, the U.S. Mint has produced more silver Eagles this year than in any years since the program started in 1986. Silver started the year around $17 per ounce, staggered into March, and then the prices began a slow rise. After breaking the $20 mark in September, the price has been hovering close to $30 the last few weeks. Silver closed at $30.50 on December 7 before dropping below $29 since.

From a collector’s perspective, this has made collecting American Eagles more expensive. Thankfully, the U.S. Mint has resolved its production issues and produced proof Eagles this year. We will see proof Eagles in 2011 with the passage of the Coin Modernization, Oversight, and Continuity Act of 2010 that changes the American Eagle Bullion law to allow the U.S. Mint to divert some metals for collectors coins.

Missing from the 2010 line up was the American Buffalo 24-karat Gold Coin. While still an authorized issued, the coin has not roamed the United States since 2008 in both bullion and proof issues. There has been no comment from the U.S. Mint as to whether the coins will make an appearance in 2011.

Circulating Coins
For 2011, the U.S. Mint will produce the Lincoln Cent as redesigned in 2010, the Jefferson Nickel that was redesigned in 2006, the Roosevelt Dime as it was designed in 1946, and the Kennedy Half Dollar as it was released in 1964. No changes are planned for these circulating issues.

In the second year of the American the Beautiful Quarters Program. If the second year designs are as well executed as the first year, the program will continue to be a success from a collector perspective. The second group of quarters will honor Gettysburg National Military Park in Pennsylvania, Glacier National Park in Montana, Olympic National Park in Washington, Vicksburg National Military Park in Mississippi, and Chickasaw National Recreation Area in Oklahoma. The U.S. Mint’s line art shows promise for a very nice looking series.

One part of the American the Beautiful Quarters Program has been the issue of three-inch five-ounce .999 silver bullion coins. Production problems have delayed the release of these coins. According to the U.S. Mint’s press release, there may be collector versions of the coin with limited production runs. Considering the high costs set by the U.S. Mint, it may be difficult for some collectors to justify. But with the production issues worked out, maybe the 2011 versions may sell better.

Dollars
For the third year of the Native American $1 Coin program, the theme for 2011 is “Supreme Sachem Ousamequin, Massasoit of the Great Wampanoag Nation Creates Alliance with Settlers at Plymouth Bay (1621)” celebrating one of the first peace treaties between the Native Americans and the Puritans who settled at Plymouth Bay. The reverse of the coin depicts the hands of the Supreme Sachem Ousamequin Massasoit and Governor John Carver symbolically offering the ceremonial peace pipe after the initiation of the first formal written peace treaty. The designs of the Native American coins have been so well thought out and executed that this one will be a wonderful addition to your collection.

Continuing the Presidential $1 Coin program, the 2011 coins will honor Presidents Andrew Johnson, Ulysses S. Grant, Rutherford B. Hayes, and James A. Garfield. History buffs will begin with President Johnson who was the first president that was impeached but not convicted, followed by three bearded Republicans who started and perpetuated reconstruction through the 19th century. The 2011 series ends with President Garfield whose 200 day term ended with his death on September 18, 1881.

Those collecting the First Spouse Gold Coins will have a year where all four issues will depict the First Lady’s of the era. Standing behind or along side the Presidents where Eliza Johnson, Julia Grant, Lucy Hayes, and Lucretia Garfield. Remember, if you cannot afford the gold coins, the U.S. Mint sells bronze medals using the same design but without the denomination.

Commemoratives
Collectors of commemorative coins will have two multi-coin commemorative issues in 2011, both with a military theme. The first commemorative will be the United States Army Commemorative to honor the history of the U.S. Army from the Revolutionary War through today. The U.S. Army Commemorative will be a three-coin set consisting of a gold $5 proof, silver $1 proof, and cupronickel clad half-dollar proof. The obverse of the gold coin represents the U.S. Army’s war service from the Revolutionary War through today. It features a representation of Continental, Civil War, modern, World War II and World War I soldiers. The reverse is based on the official U.S. Army emblem and represents the unbroken history of loyalty and commitment to defend the Nation.

The obverse of the silver proof depicts the busts of a male and female soldier, symbolizing worldwide deployment of the 21st century U.S. Army. On the reverse, the design symbolizes the seven core values of the U.S. Army featuring an image of the Great Seal of the United States that has been worn on U.S. Army dress and service uniforms since the early 19th Century.

The obverse of the clad half-dollar proof represents the significant contributions of the U.S. Army during peacetime and features a U.S. Army soldier surveying, two servicemen building a flood wall and a Redstone Army rocket used during early space exploration. The reverse design symbolizes the U.S. Army as the first military service to defend the country and its key role in the Nation’s internal development. It features an enlisted Continental soldier armed with a musket and 13 stars representing the original Colonies.

Mintage is limited to 100,000 gold, 500,000 silver, and 750,000 clad coins. The sales price will include a $35 surcharge for each gold coin, a $10 surcharge for each silver coin, and $5 for each clad coin sold. Proceeds from the sales of this commemorative ($12.25 million if all coins are sold) will go to the construction of the National Museum of the United States Army.

The other commemorative will be the 2011 Medal of Honor Commemorative Coin program. This two-coin set features a $5 gold proof and $1 silver proof coin. The obverse of the gold coin depicts the original Medal of Honor designed in 1861 by the U.S. Mint. The reverse design of the gold coin features Minerva, the Roman goddess wisdom and war, who is featured on the medals. Minerva is standing with a shield representing the Army and Navy in her right hand and the Union flag in her left hand. She is flanked by a field artillery cannon and wheel of the Civil War era.

The obverse of the silver commemorative coin will feature the three current Army, Navy, and Air Force medals with their ribbon and the connecting pad featuring 13 stars. Since the Medal of Honor is the only medal not pinned to the uniform, it was important to depict the ribbon that is used to wear the medal around the recipient’s neck. The reverse design depicts an Army infantry soldier carrying a wounded soldier to safety under enemy fire. This image conveys the courage, selfless sacrifice and patriotism of Medal of Honor recipients.

Mintage is limited to 100,000 gold and 500,000 silver coins. The sales price will include a $35 surcharge for each gold coin and a $10 surcharge for each silver coin sold. Proceeds for the sale ($8.5 million if sold out) will be distributed to the Congressional Medal of Honor Foundation to support their educational, scholarship and outreach programs.

It appears that 2010 was better than 2009 as the economy improved. Maybe there will be more of a recovery to help make 2011 even better.

Click on any image to see the larger version.
Coin images courtesy of the U.S. Mint.

Congressional Watch: Two Coin-Related Bills Passed

Dec 2, 2010 | bullion, legislative, national park quarters, palladium, US Mint

In a rare move of bipartisanship, the Senate passed two bills coin-related bills by Unanimous Consent on Tuesday that were previously passed by the House of Representatives. Bills passed by Unanimous Consent are agree upon by both party’s leaders and a voice vote is taken on the floor as a formality. No record of the vote is taken.

The first bill that passed is the Coin Modernization, Oversight, and Continuity Act of 2010 (H.R.6166). Introduced by Melvin Watt (D-NC), Chairman of the Subcommittee on Domestic Monetary Policy and Technology following the hearing of “The State of U.S. Coins and Currency” held on July 20, 2010. As passed, the law requires the U.S. Mint to research minting metals used for coining money and to report to congress what changes should be made to prevent coin production from costing more than its face value. One forward thinking aspect of the law is that it requires to U.S. Mint to tie the research to actual production numbers, as opposed to hypothetical figures. The U.S. Mint has two years to complete the research and report back to the subcommittee.

H.R.6166 also includes two technical changes to the law that will affect collectors. One change allows the U.S. Mint to change size of the planchet used for the National Park Bullion Program from 3-inches to a size between 2.5 and 3-inches. This will help the U.S. Mint deal with technical issues that has delayed the issue of the five ounce bullion coins.

For fans of the American Eagle proof programs, a wording change in the law allows the U.S. Mint to divert gold and silver to meet the demand for numismatic collectible coins. The change does not set minimum or maximum limits of coins struck but it will prevent future gaps in our collections.

Speaking of the American Eagle program, the Senate also passed the American Eagle Palladium Bullion Coin Act of 2010 (H.R.6166). The bill was introduced by Rep. Dennis Rehberg (R-MT) in support of the primary support of palladium mining in Montana where 95-percent of all United States palladium deposits are. The new law will add a one-ounce .9995 fine palladium bullion coin to the American Eagle Bullion Program. The coin will have a $25 face value and require that “the obverse shall bear a high-relief likeness of the ‘Winged Liberty’ design used on the obverse of the so-called ‘Mercury dime’” making it yet another bullion coin that will feature a design from the early 20th century. For the reverse, the law says that the coin “shall bear a high-relief version of the reverse design of the 1907 American Institute of Architects medal.” Both the Mercury Dime and 1907 AIA medal were design by Adolph A. Weinman, whose Walking Liberty design is used on the American Silver Eagle coins.

When the same bill passes both houses of congress, the bill is formally enrolled by being printed in the Congressional Record and printed on archival paper before being sent to the White House for the president’s signature. President Obama is expected to sign both bills when the paperwork makes it way down Pennsylvania Avenue.

1938 Mercury Dime image is owned by the author.
Image of the 1907 AIA Medal copied from Architecture: celebrating the past, designing the future by Nancy B. Solomon.

US Mint May Cancel Collectible Bullion

Apr 8, 2010 | bullion, US Mint

While speaking at a public forum during the recent American Numismatic Association’s National Money Show, US Mint Director Ed Moy said that it is possible that the Mint will not produce collector American Eagle coins. The US Mint cancelled the American Eagle Proof program “[because] of unprecedented demand for American Eagle Gold and Silver Bullion Coins.”

It is being reported that the demand for gold and silver bullion coins remain high making it possible that collector American Eagle coins may become extinct in 2010. Moy was quoted as saying:

I will tell you that in the last five weeks or so, we caught up to gold demand. And so with that, we’ve been storing gold coins. We’re still waiting to see if there’s going to be another spike in the near future. Silver unfortunately is still red hot.

As I had previously noted, the US Mint reported a 40-percent reduction in the coins they produced in 2009 costing 1.1-percent more than it did to produce more coins in 2008 while claiming that they introduced new efficiencies in their business process. Then why did the reporters who attended this forum not ask Moy why the resources could not be added to the production of Eagles?

Why is the numismatic press not pressing Moy for answers? Moy is an appointed official of the United States government. It is the job of the fourth estate to keep politicians accountable for the jobs they do on behalf of the American people. Unfortunately, it appears that numismatic journalists have abrogated their responsibility to serve their readers.

Israel to Issue Jerusalem of Gold Bullion Coin

Apr 4, 2010 | bullion, coins, foreign, Israel

In their last catalog, the Israel Coins and Medals Corporation, the exclusive manufacturer and distributor of coins and medals issued by the Bank of Israel, announced the “Jerusalem of Gold” bullion coin series, an annual series that will depict famous Jerusalem landmarks. The coin will contain one troy ounce of .9999 pure gold and will have a face value of 20 New Sheqalim. There will be a maximum mintage of 3,600 coins.

According to the ICMC catalog, “The coin will bear a roaring lion with a beautiful curved tail, take from a 2,800-year-old ancient seal dating from the 8th century BCE, discovered in archeological digs at Armageddon (Megiddo). The roaring lion is the symbol of Jerusalem and the Kingdom of Judah and it has appeared on Israel circulation coins, the 5 Lira Coin of 1978 and the Half Sheqel Coin of 1980.

“The reverse of the first coin will picture the Tower of David, located near Jaffa Gate in the Old City of Jerusalem. The Tower of David was constructed during the second century BCE and rebuilt in succession by the Christian, Muslim, Mamluk and Ottoman conquerors of Jerusalem. It is a well-known landmark, housing a museum and hosting varied cultural events associated with the history of Jerusalem.”

Coins are schedule to be released on Jerusalem Day, May 12, 2010. The price was not provided in the catalog.

Image courtesy of the Israel Coins and Medals Corp. scanned from their catalog.

US Mint Math: Costs More to Produce Less

Feb 10, 2010 | bullion, cents, coins, economy, Federal Reserve, US Mint

After reading a few stories on how the president’s 2011 federal budget was proposing changes to coin composition. Many of these articles point out how the budget projects that changes could save the US Mint about $150 million per year after making over $777 million in circulating coins (business strikes) in fiscal year 2009. The US Mint’s Fiscal Year 2009 Annual Report says that the US Mint earned over $904 million in seigniorage from all sources.

While everyone is concentrating on the costs of changing coinage metals, there is a missing point: even if the US Mint was able obtain the copper covered zinc planchets for the cent at no cost, the US Mint will lose 0.62-cents per cent struck just for the labor and administrative costs.

In 2009, the US Mint shipped $777 million in circulating coins after shipping over $1.2 billion in 2008. The 40-percent reduction in production also was matched by a 40-percent reduction in the amount the US Mint spent on the metals. In other words, the increase in the costs of metals between 2008 and 2009 was minimal. However, the cost to produce the 40-percent fewer coins cost the US Mint 1.1-percent more in 2009! With presses sitting idle for long periods of time for the first time in many years, the US Mint paid $98.1 million in 2009 for striking few coins and costing $97 million in 2008.

The US Mint documents the costs in the Annual Report as Sales, General & Administrative (SGA). In the Annual Report the reported SGA from 2006 through 2009 has remained stable. Increases have roughly followed the rate of inflation. When looking at the SGA for individual coins, the US Mint spent $65.3 million to sell $459 million one-dollar coins to the Federal Reserve in 2009. In 2008, it cost $52.2 million to sell $475 million one-dollar coins.

The US Mint’s core responsibility is to manufacture the coins required by the Federal Reserve for commerce. In 2009, the seigniorage for business strikes was $427.8 million while making $32.7 million for bullion sales.

The problem is not the cost of the metals. The problem is the inefficiency of operations at the US Mint. “In FY 2009,” the US Mint’s FY2009 Annual Report reads, “the worsening economic environment challenged our ability to maintain efficient manufacturing operations but also presented opportunities for long-term efficiency gains.” Then where are the efficiencies? If the US Mint has an efficient manufacturing process, then why did it cost the US Mint 1.1-percent more in 2009 to producing 40-percent fewer coins than they did in 2008?

If the Obama Administration wants the US Mint to produce more in seigniorage, then the place to start is to immediately replace the political hack that is the current director. A replacement should be someone that has had a manufacturing background working in a regulated environment to lead the US Mint forward.

What is in that Gold

Dec 31, 2009 | bullion, Eagles, gold

On the NGC Forums, there was a discussion about collecting gold dollars where someone asked about their composition. Being curious, I looked up the composition information. What I found was that there were different compositions that was tied to the evolution of US coinage.

After posting the basic information, I thought it would be interesting to look up which series of gold coins were made from each of the different compositions. The rest of this posting is what I found after consulting a few references.

The Coinage Act of 1792, the First Coinage Act, set the standard for gold coinage to be .9167 fine with the balance of silver and copper. Gold coins struck 1792-1834 were made of this composition. These coins include:

  • Turban Head $2½ Quarter Eagles (1796-1807)
  • Capped Bust $2½ Quarter Eagles (1808-1834)
  • Capped Bust to the Right $5 Half Eagles (1795-1807)
  • Capped Bust to the Left $5 Half Eagles (1807-1812)
  • Capped Head to the Left $5 Half Eagles (1813-1834)
  • Capped Head to the Right $10 Eagles (1795-1804)

The Coinage Act of 1834, the Second Coinage Act, set the price of gold at $20.67 and changed the composition to .8992 fine with the balance of silver and copper. Gold coins struck from 1834-1839 were made of this composition. These coins include:

  • Classic Head $2½ Quarter Eagles (1834-1939)
  • Classic Head $5 Half Eagles (1834-1838)

The Coinage Act of 1837, also called the Bland-Allison Act, put the US on a bimetal monetary standard mostly to help the silver industry following the Panic of 1873. Originally, President Rutherford B. Hayes vetoed the bill only to have congress override the veto. Gold coins struck from 1839-1933 were made of .9000 gold and the balance was silver and copper. These coins include:

  • Liberty Head One Dollar (1859-1854)
  • Indian Princess Dollar (1854-1889)
  • Liberty Head $2½ Quarter Eagles (1840-1907)
  • Indian Head $2½ Quarter Eagles (1908-1929)
  • Indian Princess 3 Dollars (1854-1899)
  • Liberty Head $5 Half Eagles (1839-1908)
  • Indian Head $5 Half Eagles (1908-1929)
  • Liberty Head, No Motto Above Eagle $10 Eagles (1838-1866)
  • Liberty Head, Motto Above Eagle $10 Eagles (1866-1907)
  • Indian Head $10 Eagles (1907-1933)
  • Liberty Head $20 Double Eagles (1849-1907)
  • Saint-Gaudens $20 Double Eagles (1907-1933)

All gold commemoratives, both prior to 1933 and since 1982, are struck using .9000 gold. Commemorative struck before 1933 was filled with 1-part silver and 2-parts copper. Commemorative coins struck since 1982 use a 2-part copper to 1-part nickel filler.

The $4 Stella patterns were an attempt to create a standard coinage composition for international trade. The composition called goloid was made of 6 grams of gold, 0.3 grams of silver, 0.7 grams of copper. A Flowing Hair and Coiled Hair Liberty Head patterns were struck in 1879 and 1880.

American Gold Eagle bullion and proof coins are .9167 gold (22 carat). The one ounce gold Eagle contains one troy ounce of gold plus .0909 troy ounces of filler consisting of 2-parts nickel to 1-part copper.

The American Buffalo gold coin contains one troy ounce of .9999 fine gold (24 carat) with copper as the filler.

I hope someone finds this useful.

Reforming America’s Currency: Part 5-Bullion

Nov 9, 2009 | bullion, foreign, gold, silver, US Mint

My motivation for recommending the restructuring of the US Mint was when they announced that proof silver and gold American Eagle coins will not be produced in 2009. The logic of the decision in the context of what we know of the US Mint’s operations was unpalatable.

Restructuring the bullion program is to first acknowledge that it is a profit center for the US Mint. Its sole purpose is the buy precious metals and create bullion coins for sale at a significant profit. In the 2008 Annual Report, the profit on bullion issues was 22-percent over all costs, more than circulating currency or commemorative coins.

The anchor of the bullion program are the American Eagles, which has been the most successful bullion program since its inception in 1986. The program started with silver and gold American Eagles. Platinum bullion Eagles were first struck in 1997. American Silver Eagle coins are one troy ounce of 99.9-percent pure silver. American Gold Eagles contain 22-karat (91.67-percet) of gold balanced with silver and copper struck in 1/10 ($5), ¼ ($10), ½ ($25), and one ($50) troy ounces. American Platinum Eagles are struck using 99.95-percent platinum in 1/10 ($10), ¼ ($25), ½ ($50), and one ($100) troy ounces. This program will not change and the US Mint will continue striking coins to meet the demand.

Under the current law, it is not required that the US Mint strike proof versions of these bullion coins. This restructuring will change this to require a minimum mintage of these coins. For the future, the US Mint will strike proof coins to meet the demand with a maximum number in ounces of metals used. For this policy, it is proposed that 1 million troy ounces of silver be used for proof coins meaning the production will be limited to 1 million coins. Gold will be limited to 500,000 troy ounces of gold across all sizes. Finally, platinum will be limited to 100,000 troy ounces in proof coins.

I am not proposing changes to the 24-karat (.999 fine) Gold Buffalo program.

To complete the transformation, the First Spouse program will be transfered to bullion issues and continue using the same rules as it does today.

This year, the US Mint introduced the 2009 Ultra High Relief Coin. This coin brings to life the Augustus Saint-Gaudens proposed high relief design for his $20 Double Eagle design that 1909 technology could not create. The coin has been praised for its beauty and should be a future Coin of the Year candidate.

The concept of creating special bullion coins like the Ultra High Relief coin is something that a new bullion program can do. The US Mint, with direction from the CCAC acting as the US Mint’s Board of Directors can authorize new bullion coins that will allow the US Mint to create new collectibles that could be marketed to a wider audience. In addition to special strikes, the new bullion program can include coins with privy marks, special reverses, enameled coins, even coins made from multiple materials.

Examples of what could be accomplished can be seen in the 2007 Coin of the Year and 2008 Coin of the Year candidates. Although there are wonderful single metal coins, there are some wonderful coins using other design elements. In fact, the the 2009 Coin of the Year award was given to the 2007 Mongolia Wolverine coin with diamonds for eyes that is very intriguing when seen in hand!

It is not my intent to tun the US Mint into the non-circulating legal tender (NCLT) producer like the Royal Canadian Mint who is known to produce a large number of bullion-related issues. The CCAC should limit the introduction of bullion issues to a few a year and limit the number of coins that could be produced for each type. But if the US Mint can find influence in more areas than classic US coinage to produce beautiful collectibles using bullion metals.

Before I forget, these coins are bullion collectibles sold as a profit for the US Mint. They are not commemorative coins and not subject to the fundraising considerations proposed for commemorative coins.

Although the US Mint has been the focus of this series, we cannot reform America’s currency without considering paper money. Next, I will look at the Bureau of Engraving and Printing and what to do with Federal Reserve Notes.

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