Coin World reported that the U.S. Mint knows about more 1933 Saint Gaudens Double Eagle gold coins in private hands.
The ten 1933 Saint-Gaudens Double Eagles confiscated by the government from Joan Lanbord, daughter of Israel Switt.
For those who have not read Illegal Tender by David Tripp or Double Eagle by Allison Frankel, aside from both being worth reading, they claim that 25 of these coins were illegally removed from the Philadelphia Mint. Of those 25 coins, nine were confiscated during the 1940s and 1950s by the Secret Service, ten are from the Langbord Hoard stored at the Bullion Depository at Fort Knox, and one is the Farouk-Fenton example which is the subject of the books.
That leaves five left.
During the Pennsylvania Association of Numismatics (PAN) spring show, U.S. Mint Senior Legal Counsel Greg Weinman said that he knows where one is located in the United States, one is in Europe, and a third is somewhere else. The location of the last two is not known.
It can be speculated that the “somewhere else” may be in Egypt. On February 8, 2008, the Moscow News Weekly reported that a version of the coin was found in Egypt in an old box that was owned by the discoverer’s father (web archive link). Although there had been a lot of speculation that coin might not be genuine, there has been no further reports as to the disposition of this coin.
Weinman said that there are no plans to go after the three coins where the U.S. Mint knows their location.
Following the trial in 2011 with a jury verdict against the Langbords. After the ruling, Assistant U.S. Attorney Jacqueline Romero, the government’s lead attorney in the case, came out with a courthouse statement, “People of the United States of America have been vindicated.”
If the country is to be vindicated and the government has consistency in its argument that the coins are “chattel,” according to Weinman, then it is their legal obligation to have the U.S. Secret Service pursue the three known examples.
Otherwise, it could be said that the government has undergone selective prosecution and has given up its right to the ten in its possession or the five that are still in public hands.
It is these inconsistencies of policies with regard to these coins that could drive collectors away. While most people may never find or own one of these rare coins, what happens to those who might get lucky.
While the 1913 Liberty Head Nickels were not considered chattel because they were never struck for circulation, the government fought the finding of the 1974-D Aluminum cent forcing its return. The circumstances for the striking of both coins are similar but the government has treated each issue differently.
This is not a matter of integrity of the hobby. It is the integrity of the U.S. Mint and their bogus argument of what is or is not something they produced for whatever the reason. The integrity of the U.S. Mint can be questioned when they applied 21st century operating standards to the U.S. Mint of the 1930s in order to convince a “jury of peers,” none of which probably had a numismatic background questioning their ability to be peers, that these coins belonged to the government for it to hold like some almighty savior of us from the depths of fraudulence.
Do you still feel vindicated?
There are politicians so full of themselves that they even have to show it off with challenge coins.
EPA Administrator Scott Pruitt
Scott Pruitt, the 14th Administrator of the Environmental Protection Agency, has decided that rather than saving taxpayer money, he will spend additional money to have the EPA redesign the challenge coin that he uses on behalf of the EPA.
According to the New York Times, Pruitt wants to make the challenge coin bigger and to delete the EPA logo. According to a retired career EPA employee, it appears that Pruitt wants the coin to be all about him and not the agency.
The reverse side of the E.P.A. challenge coin conceived under Administrator Lisa P. Jackson, left, and the face of the coin issued when Gina McCarthy led the agency. (Photo Credit: Ron Slotkin/The New York Times)
“These coins represent the agency,” said Ronald Slotkin, who served as the director of the E.P.A.’s multimedia office. “But Pruitt wanted his coin to be bigger than everyone else’s and he wanted it in a way that represented him.”
It is reported that Pruitt does not like the agency seal because (brace yourself) he felt it looks like a marijuana leaf!
Official logo of the United States Environmental Protection Agency
Leaf of the cannabis sativa plant
Pruitt is not the first agency head to extend his ego to challenge coins. Last fall, Interior Secretary Ryan Zinke commissioned his own challenge coin. At the time, it was thought to be the only Cabinet-level official to have his own challenge coin.
In order to create a new challenge coin, the manufacturer must create new dies. Making new dies does have a cost, as opposed to either using an existing die or having an existing design reworked. According to the website of Challenge Coins Plus, the company The New York Times story said was involved with making other challenge coins for the EPA, if Pruitt wants a 2.5-inch coin, the mold fees are $100 per side ($200 for both sides). Once the molds are made, 2-sided colored coins are $5.57 each for 2,000 coins ($11,140) without customizations such as custom edges and capsules.
However, Pruitt is not stopping with challenge coins. He has ordered pens, notebooks, and leather binders to exclude the logo and replaced with his name in a larger font. All at an additional charge to taxpayers.
At least when the U.S. Mint fails, it does not cost the taxpayers any money since the U.S. Mint’s operations are paid by the seignorage and not from the general treasury.
I write this blog from the perspective of a collector. I champion the collector. I think that collectors are the most qualified to determine the direction of the hobby. The collector is the consumer and the consumer is almost always right.
When it comes to helping with the direction of the hobby dealers should also have a say. Their input is important. But they should be there to support the collector because without collectors the dealers have no business. Dealers should not be dictating the direction of the hobby.
Recently, I was listening to The Coin Show podcast hosted by Matt Dinger, a dealer in Indianapolis, and Mike Noodle, a collector that says he works in a coin shop (I think he said it was a part-time gig), and became very concerned when Matt said that the U.S. Mint was hurting the hobby.
Are these sets hurting the hobby? Should the U.S. Mint stop producing them? (U.S. Mint image)
Regular listeners to The Coin Show knows that Matt is not a fan of modern coins and the products of the U.S. Mint. In fact, during the last show, he admitted to not carrying American Eagle coins because he does not want to support the U.S. Mint in damaging the hobby.
During the podcast, Mike came to the defense of U.S. Mint collectors but that defense was tempered when he said that collecting U.S. Mint products was for beginner collectors and that it was a way to start before the collector “graduate” to other collectibles.
I have questioned Matt and Mike in the past on Facebook but this time I felt their statements crossed a line. My regular readers know I can get hyperbolic but I try to remain respectful. As it happens on Facebook and anywhere else on the Internet, people cannot take the words at face value and have to read something into them.
This time I emphasized that not only do I collect U.S. Mint items but have not “graduated” to the type of collectibles Mike and Matt proclaim to be real collectibles. New readers can go through this blog and see how my collection can be classified as normal to eclectic.
After a lot of angry discussions (you will see a sample below) and some churlish responses from others (not Matt or Mike), I finally coaxed out the reasons for Matt’s hatred of modern U.S. Mint products. Unfortunately, it seems his reasons have more to do with the industry than the U.S. Mint.
According to Matt, the U.S. Mint is harming numismatics by selling annual sets like proof and mint sets at the prices they set. During the Facebook discussion, Matt and Sam Shafer, another Indianapolis-area dealer, said that they believe the U.S. Mint’s prices are too high.
From their perspective as dealers, they claim it is the U.S. Mint’s fault for the differences between the manufacturer’s suggested retail price the secondary market.
Using that logic, can I blame Chevrolet for the secondary market price of the 2014 Silverado I just purchased? If I tried, General Motors would laugh me under the tonneau cover of the truck! Yet, coin dealers are applauded for applying the same logic. This does not make sense.
How can you blame the manufacturer for the secondary market’s reaction?
Matt wrote, “I feel like the depreciation seen in modern sets is much more harmful to potential collectors or beginning collectors.”
I guess if General Motors followed that logic, they would stop making trucks!
But we are talking about collectibles. In that case, Topps, Fleer, and Upper Deck should stop producing baseball cards.
This is only an argument by dealers who would rather sell what they like and not take a broader view of the collecting market. In my new life, I am a collectibles and antiques dealer. The items I buy are either from the secondary market or I buy new items from manufacturers such as comic book and baseball card publishers.
I have been in antiques and collectibles market as a part-time dealer for 10 years. During that time I have been selling at antique shows, flea markets, and online. I have met and spoken with dealers about the market and its volatility. Everyone I speak with survived the Great Recession of 2008. What I learned in these discussions is that ONLY the numismatic industry demands that its collectibles rise in value. If the coin does not increase in value it is not because the market has spoken. It has to be someone else’s fault. After all, these dealers have to be right so it must be the U.S. Mint’s fault.
This 1901 $10 Dollar Lewis and Clark Bison note (Fr# 122) was sold by a dealer at an antiques show by a dealer not complaining about the collecting market.
The vast majority of dealers are very good and very reasonable. Many do understand the view of the collector and work with them. However, there is a subset of dealers that can be some of the most stubborn business people I know. They refuse to change with the market. Even if the market is not looking for their niche, they will not adapt to the market. Their mind is made up do not confuse them with facts.
They are also the most vocal in their opposition to market forces. Their usual retort is “you don’t understand, you’re not a dealer!”
With all due respect, I do not need to be a dealer to know that not changing with the times is doing more to hurt the hobby than the U.S. Mint is by doing its job.
Another argument is that the U.S. Mint has too many programs. Are they kidding me? Have they looked at the offering by the Royal Canadian, New Zealand, and Royal Mints? When was the last time they looked at the websites of the Perth Mint or the Pobjoy Mint? Comparatively, the U.S. Mint’s catalog looks bare!
Did you know that the Pobjoy Mint struck this coin under the authority of the British Virgin Islands. Is this good for the hobby? (Pobjoy Mint image)
The U.S. Mint does not offer dozens of non-circulating legal tender (NCLT) coins. U.S. Mint coins are struck and not painted. The U.S. Mint does not offer piedfort version of circulating coins or even coins guilt in gold or palladium. The U.S. Mint does not make deals with movie production companies, comic book publishers, or soft drink manufacturers to issue branded coins.
Every coin that the U.S. Mint offers for sale has an authorizing law limiting what they could produce. According to those laws, the U.S. Mint has to recover costs and is allowed to make a “reasonable” profit.
But what is reasonable? This is a question that has a lot of valid arguments on both sides. However, the U.S. Mint is subject to oversight by the Treasury Office of the Inspector General (OIG) and, occasionally, review by Congress’s Government Accountability Office (GAO). Neither oversight agency has produced a report saying that the U.S. Mint’s prices are unreasonable.
The U.S. Mint is selling what they manufacture at a price that the competent oversight agencies have not complained about. The only one complaining is by the dealers in the secondary market.
Why are these dealers complaining?
We get to the crux of the problem when Sam Shafer responds, “I would rather sell a customer a Morgan dollar than a set of glorified shiny pocket change.”
It does not take a rocket scientist to understand why a dealer would write that. A dealer makes more money selling Morgan dollars than modern coins. It is about business, not about what the U.S. Mint is doing. It is also a very reasonable response if the dealer would own up to the fact that it is about the impact to their business. Blaming the U.S. Mint is like crashing into a wall and blaming the wall for being there!
But Sam must have had some bad experiences: “How about you come down from your pedestal, put your loudspeaker up your rectum and work in a shop for a few years where you can witness the devastation of families first hand for a few years.”
This is a strong statement, even if you discount the placement of inanimate objects into bodily orifices they do not belong. What has the U.S. Mint done to cause “devastation?” The U.S. Mint sells products to those who want to buy them. You are not forced to buy from the U.S. Mint.
Sam continues, “While your [sic] at it maybe you can take up your glorious cause of finding homes for the 50 billon [sic] sets the government produced and bulk sold over the years to the collectors who assumed that 5 sets would better than 1.”
By Sam’s logic, it is the U.S. Mint’s fault that someone speculated and the investment did not pan out? Whose fault is that? Who told someone that buying these sets would be a good investment? Not the U.S. Mint! Where does the U.S. Mint say in any of its publications or website that coins make a solid investment? How could these speculators have come to this conclusion?
The U.S. Mint goes out of its way to avoid participating in the investment market. They do not represent any of their products as investment grade instruments. This is why the U.S. Mint does not sell investment bullion directly to the public. The government sells these products to distributors who will then sell to the dealers that will sell them to the public. The government is not involved in the price speculation of numismatic items.
2018 Fiji Coca-Cola Bottle Cap-shaped coin is not a U.S. Mint product. It contains 6 grams of silver (about $3.20) and costs $29.95. Is this good for the hobby? (Modern Coin Mart image)
The U.S. Mint does not even acknowledge historical and aftermarket pricing for the items they manufacture.
The U.S. Mint sells collectible coins. They do not sell investments.
Over the years, I have received more complaints about dealers than allegedly worthless State Quarters or the U.S. Mint’s annual sets. But why are coins allegedly worthless?
Did the U.S Mint make claims that these one-time-only coins are really special and that they would be the greatest thing since sliced bread?
Did the U.S. Mint create rolls in sonically sealed plastic holders and tout them as the next great collectible?
This is not a U.S. Mint Product! (Danbury Mint image)
Did the U.S Mint create books, boards, folders, albums, maps, touting this as a once-in-a-lifetime way to collect?
All this came from the secondary market. Who runs the secondary market? DEALERS!
DEALERS set the values for the coins based on what they sell them for.
DEALERS take coins and entomb them in sonically sealed plastic holders saying that this is how you should be collecting. They tell you one encapsulating service is better than another and then make you pay different prices if you use a service they do not like even if the number assigned as a grade is the same on both pieces of plastic.
DEALERS have convinced an entire class of collectors that if they do not have a plastic holder with this new, whiz-bang label that their collection is not complete.
DEALERS have also complained about whose name and image have appeared on some of those labels.
Tragedy grips the industry when a Pawn Star is featured on a plastic holder’s label! (NGC image)
DEALERS genuflect when someone puts a shiny green sticker on a plastic holder as if it was blessed by some deity. They prostrate themselves if the plastic holder is granted that divine gold sticker! After preaching this gospel to their flock, you are considered a heretic if you question the validity of the sticker and the motives of the sticker maker.
While the U.S. Mint is not perfect, the problems with the numismatic market have not been created by a tightly regulated government bureau. The problems come from the secondary market whether they are overstating the values of these items or demeaning collectibles that they cannot make a hefty profit on.
Maybe it is time for dealers to look in the mirror and ask whether the U.S. Mint is hurting the hobby or maybe they are refusing to recognize the problem is right in front of them.
The Royal Canadian Mint has officially Jumped the Shark!
According to the Urban Dictionary, jump the shark is “a term to describe a moment when something that was once great has reached a point where it will now decline in quality and popularity.” The origin came from the premiere of the fifth season (1977) of the sitcom Happy Days in which The Fonz, the stereotypical 1950s greaser, jumps over a shark on water-skis. It was out of character for The Fonz and seen as a ploy to boost sagging ratings.
2018 Canada $20 coin commemorates the 1967 Falcon Lake alleged UFO incident. (Source: Royal Canadian Mint)
Popular usage has been those times when a show, company, or anyone does something so outlandish to attract attention that was once lost.
One might say that the Royal Canadian Mint might have jumped the shark in the past, but they have really outdone themselves this time. They issued a one-ounce silver, $20 face-value non-circulating legal tender (NCLT) coin to commemorate an alleged UFO sighting.
When it goes on sale, the will cost $129.95 ($101.69 USD).
Aside from being 6.22-times the spot price of silver, the design is printed on the egg-shaped planchet. There appears to be nothing about the coin that is struck.
I have heard some say that things the U.S. Mint is doing is bad for the hobby. Some have targeted the American Liberty 22th Anniversary Gold Coin as being over the top. Although I have a problem with the coins having a high premium over spot prices, the coin pales in comparison to the UFO and other lenticular coins being offered by the Royal Canadian Mint.
And now the news…
April 2, 2018
Sales in March of U.S. Mint American Eagle gold fell to their lowest for the month, and silver coins dropped to their lowest in 11 years, government data showed. → Read more at cnbc.com
April 2, 2018
Scientists are left wondering how the coins remained hidden for so long. → Read more at newsweek.com
April 2, 2018
A Long Island businessman who built a textile empire by peddling irregular sweaters at local flea markets thought he had a fool-proof way to boost his assets — invest in a pal’s coin business. Bad … → Read more at nypost.com
April 3, 2018
The oval-shaped coin immortalizes Stefan Michalak’s experience in Whiteshell Provincial Park, more than 50 years ago in what became known as the Falcon Lake incident. → Read more at thestar.com
April 3, 2018
The Royal Canadian Mint has released a new $20 coin to commemorate one of Canada's closest encounters with a UFO. → Read more at ctvnews.ca
April 5, 2018
Now that the nation has a $1.3 trillion budget, lawmakers can resume debate about whether to pinch pennies. The threat to do away with pennies and nickels → Read more at newsherald.com
April 5, 2018
A trove of bronze coins, the last remnants of an ancient Jewish revolt against the Roman Empire, have been discovered near the Temple Mount in Jerusalem. → Read more at foxnews.com
April 5, 2018
Medieval coins dating back 800 years have been unearthed in north Shropshire. → Read more at shropshirestar.com
In last Sunday’s Weekly World Numismatic News I commented on a story that members of the Philippines legislature were upset that the Bangko Sentral ng Pilipinas (Central Bank of the Philippines or BSP) issued coins that were similar look and feel but of different denominations. I related the story to the plight of the Susan B. Anthony dollar.
A 1979-D Susan B Anthony dollar found in change that was mistaken for a quarter.
This week, I was involved in a real-life example of this confusion.
While getting ready to retire for the evening, I empty my pockets on my dresser and look to see if there is anything interesting. Since my only trip of the day was a local grocery store, I did not expect anything. As I looked at what I thought was 78-cents something did not look right. As it turned out, one of the quarters was not a quarter.
Mixed in with the change from my single transaction of the day was a 1979-D Susan B. Anthony dollar coin. Not only did the cashier make the mistake, but when I accepted the change I did not catch the difference.
A real-life example as to the reason why the Susie B. was not a successful coin!
While Congress delves into the abyss of their usual folly, the numismatic industry went almost hysterical at the bill introduced by Rep. Barbara Lee (D-CA) to create yet another quarters series to begin in 2021.
Not considering the topic, there is a fatigue over changing quarter designs. The 50 State Quarter Series was a success while economic times were good and the states were taking their responsibility for designing the quarters serious. Some states really missed out on good design and good choices that there are some quarters that should be melted and spared from our change.
And while there have been wonderful designs for the America the Beautiful quarters, the response has been anywhere from underwhelming to non-existent. Few people know the series exists and when it is pointed out to them there is a collective shrug of acknowledgment.
The other problem goes to the mouth-breathing aspect of the coverage in that the bill was just introduced into the House of Representatives, it is not the law. It is a long way from a bill being a law. If you forgot the process you can always rewatch the old Schoolhouse Rock video I’m Just a Bill.
For the record, I have no problem with honoring the Nineteenth Amendment and the women who made it possible. I would also have no problem with a coin program honoring the Fourteenth Amendment and the people involved in Civil Rights. This country can use a dose of education and if it can be done using coinage, then maybe I might reconsider my stance on the ever-changing coin designs.
At least David Ryder’s nomination was confirmed!
PN1355: David J. Ryder — Department of the Treasury
Date Received from President: January 8, 2018
Summary: David J. Ryder, of New Jersey, to be Director of the Mint for a term of five years, vice Edmund C. Moy, resigned.
Received in the Senate and referred to the Committee on Banking, Housing, and Urban Affairs. — Jan 8, 2018
Committee on Banking, Housing, and Urban Affairs. Ordered to be reported favorably. — Jan 17, 2018
Reported by Senator Crapo, Committee on Banking, Housing, and Urban Affairs, without printed report. — Jan 17, 2018
Placed on Senate Executive Calendar. Calendar No. 596. Subject to nominee’s commitment to respond to requests to appear and testify before any duly constituted committee of the Senate. — Jan 17, 2018
Considered by Senate. — Mar 21, 2018
Confirmed by the Senate by Voice Vote. — Mar 21, 2018
H.R. 5308: Women’s History and Nineteenth Amendment Centennial Quarter Dollar Coin Program Act
Referred to the House Committee on Financial Services. — Mar 15, 2018
NOTE: This was written and queued for posting prior to the confirmation of David Ryder to become the 39th Director of the U.S. Mint.
Earlier this month, Rep. Alex Mooney (R-WV) complained to the U.S. Mint that they did not answer an inquiry to his satisfaction. Mooney, like the rest of congress who does more for show than being constructive, went to the press in order to show his dissatisfaction.
Today’s “Dummy of the Day Award” goes to Rep. Alex Mooney (R-WV) (Official House of Representatives Photo)
In October, Mooney and Rep. Frank Lucas (R-OK) sent a letter to the U.S. Mint asking about what is being done to protect the integrity of U.S. coinage from counterfeiting. The letter contained a gold-plated tungsten American Gold Eagle coin. It was sent after the testimony of David Ryder during his confirmation hearing.
The letter was addressed to Acting Deputy Director David Moti (sic) and Randolph D. Alles, Director of the U.S. Secret Service.
The letter sent by Mooney and Lucas was sent to the U.S. Mint that was run by its fourth non-appointed, interim director since the resignation of Edmund Moy in January 2011. While the interim directors have the same power as political appointees, it is customary that the interim directors maintain the status quo until the Senate approves the president’s nomination.
The U.S. Mint’s response was written under the signatory of Acting Deputy Director David Motl. Motl, Motl’s response to the representative’s inquiry read exactly what can be expected from an interim appointee warming the seat. Basically, the letter said that the U.S. Mint is doing its job as defined by the law and the Acting Deputy Director is working to keep the agency going until a regular director can be approved.
Of course, these representatives did not like this response. They want the U.S. Mint to do something and even gave suggestions. There are two problems with the response that reads like an advertisement for a commercial service. First, if these representatives understood the division of responsibilities, the agency responsible for protecting the integrity of the money supply is the United State Secret Service. The U.S. Mint is the manufacturer of the money, the U.S. Secret Service is the police force that is responsible for protecting the money. One would think that members of Congress who have access to staff and a full-time research department would understand the roles of the various agencies.
Secondly, what would they want an acting director to do? If the acting director is there to make sure the bureau functions until a new director is appointed, then figure out why the U.S. Mint does not have a permanent director? If Mooney does not like the answer then why not take a walk to the other side of the capital and ask Sen. Chuck Grassley (R-IA) why he is throwing a hissy fit and holding up the nomination of a qualified candidate that could legally answer the questions.
Instead, Mooney would rather complain and pound his proverbial chest to make it look like he is doing something whereas to anyone who really looks at the situation sees him as foolish.
David Croft, Acting Deputy Director of the U.S. Mint since 1-Feb-18 (U.S. Mint Photo)
To add to the fun, the U.S. Mint has a new Acting Deputy Director. Because there is a limited amount of time that a government employee can serve in an “acting” role for an appointed position, David M. Croft has been appointed to the posting as of February 1, 2018. Prior to his appointment as Acting Deputy Director, Croft was the Mint’s Associate Director of Manufacturing. Croft becomes the fifth non-appointed “acting” director since Moy’s resignation.
If there are members of Congress that are not happy with the way the U.S. Mint is being run, they need to work out the problems which they are responsible. Mooney and Lucas should take the U.S. Mint leadership issue up with Grassley. Otherwise, they are doing nothing more than spitting into the wind.
While watching television, a new advertisement sent off the usual bells and whistles that the numismatic industry needs to watch out for.
Image of the alleged 1964 Morgan Dollar from the cover of A Guide Book to Morgan Silver Dollars 5th Ed. by Q. David Bowers
Our “friends” at the National Collectors Mint has seized on the story of the dies and drawings of a potential 1964 Morgan Dollar that was first published in the fifth edition of A Guide Book of Morgan Silver Dollars. They came up with a tribute proof.
As with all of their tribute proofs, it is clad in 71 milligrams of pure silver. To give you an idea of how much 71 milligrams is, it is 0.002504 ounce or just a little more than two one-thousandths of an ounce. If troy ounces are more your style, it is 0.0022827 troy ounces. This item has 4-cents worth of silver using the current silver price of $16.33 per troy ounce.
With mouth agape as I was trying not to throw something at the television, not only are they selling these at $9.95 each ($19.95 on their website) but they may have figured out a way not to have to embed the word COPY somewhere. They must have made a “deal” with someone in the Cook Islands to put their name on the coin so as to represent it as a coin issued by or for the Cook Islands.
On the back of the coin, rather than the regular legend, it says “TRIBUTE TO THE UNITED STATES OF AMERICA.” A portrait of Queen Elizabeth II is on the left side of the eagle and “COOK ISLANDS” is on the right. They are claiming that these are legal tender coins of the Cook Islands. The commercial does not identify these as non-circulating legal tender coins even though they do make that distinction on their website.
In all other ways, it looks like it could be a 1964 Morgan Dollar.
I was told that commercials for this coin first appeared last August, likely not on cable stations I watch. Apparently, they are stepping up their advertising because I saw it twice on Tuesday night.
Like most of their stuff, collectibility is in the eye of the beholder. However, if someone asks whether you think it is a good buy I would recommend you tell them to save their money. I have seen these “tribute coins” in the junk bins at shows for prices ranging from $1.00-$2.50. The fact that they are in dealer junk bins should be enough of a warning!
Here we go again. Another story about how one country is starting to go cashless and the pundits crawl out of the woodwork saying that the United States should do the same.
There are a lot of reasons why this will not happen in the United States. One of the biggest reason is the overall economic impact that can affect the actual strength of the U.S. dollar as the world’s reserve currency.
The strength of the U.S. dollar is based on the (relative) security of our government and that the Gross Domestic Product (GDP), the measure of all goods and services produced within a country. According to The World Bank 2016 data (the latest available), the United States has the largest economy with a GDP of over $18.6 trillion. Sweden, the world’s 22nd largest economy, has a GDP of over $514 billion. Their economy is 2.76-percent the size of the United States’s economy.
It is the difference between dumping a bucket of water versus draining an Olympic-sized pool.
But wait, you exclaim, the United States already has an economy that is already electronic and should be able to follow suit. According to the Federal Reserve Bank of San Francisco, based on 2016 data, 31-percent of all transactions are made in cash. Most of the cash usage, 60-percent, are for transactions of $10 or less with lower income people preferring cash over middle and higher income consumers.
“Since 2009, the compound annual growth rate (CAGR) for the number of notes in circulation has been 5.6 percent, with the value of currency in circulation growing at a 7.4 percent annual growth rate,” reports the San Francisco Fed.
When we are not using cash, we are using cash equivalences such as debit cards and pre-paid debit and credit cards. Credit-related purchases account for approximately 20-percent of all transaction.
Cash is not going away anytime in the near future which means that the U.S. Mint and Bureau of Engraving and Printing will continue to produce collectible numismatics for quite some time.
And now the news…
February 18, 2018
At a public toilet in a shopping centre in Gothenburg, a struggle is taking place between old and new Sweden. Last year, the the shopping centre installed cash-free toilets, forcing customers to pay with their mobile phones – a process new to most. → Read more at theguardian.com
February 18, 2018
South African Reserve Bank subsidiary, the South African Mint, has announced new collectables product ranges that will appear in the global coin market this year, including the ‘Celebrating South Africa’ series, which will commemorate the life of former President, distinguished Statesman and global icon Nelson Mandela. → Read more at m.engineeringnews.co.za
February 19, 2018
The coin, dubbed the Jewelled Phoenix, was crafted from 99.9 per cent pure gold and inset with 1.22 carats of rare, natural fancy pink diamonds from Rio Tinto’s Argyle diamond mine in Western Australia. → Read more at jewellermagazine.com
February 21, 2018
FOR 60 years, generations of children have grown up with the lovable, marmalade-eating bear, created by the late Michael Bond. But now, it has been announced the Queen has ordered a batch of specia… → Read more at thesun.co.uk
February 23, 2018
CHAMBERSBURG, Pa. — The Franklin County (Pa.) Veterans and 9/11 Memorial Park now has a commemorative coin for guest speakers, dignitaries and donors. → Read more at heraldmailmedia.com
February 23, 2018
Japan’s government has unveiled designs for 5 commemorative coins for the 2020 Tokyo Olympics and Paralympics. → Read more at www3.nhk.or.jp
February 23, 2018
CHANDIGARH: When the collection of original Sikh coins is available at half the price in the open market, the Punjab Government has paid lakhs of rupees to a private firm just for minting duplicate coins. → Read more at tribuneindia.com
February 23, 2018
JIM THORPE — Jim Thorpe Neighborhood Bank on Broadway was very busy with customers looking to get the latest Native American $1 coin. Take a closer look and you’ll see why. The coin has the face of the borough’s namesake etched into it — Jim Thorpe. "We actually heard about it at another store that they were getting coins issued for Jim Thorpe. It was very enjoyable to find out so we decided to walk down and come over here to the bank," said David Knarr, Hellertown. → Read more at wnep.com
February 23, 2018
Kitco News' Weekly Gold Outlook recaps how the week's events affected the gold market, and where expert analysts think the metal is headed next. Every Friday, get an in-depth look into the metals space and see how experts see the fundamentals set up gold in the week ahead. → Read more at kitco.com
February 24, 2018
THERE’s a new 50p coin causing a stir with collectors. → Read more at dailystar.co.uk
It is difficult to turn on the television, read the news, or visit social media without the tragedies of the day smacking us in the face. Although crime statistics are the lowest it has been in generations, there are some crimes that have seen a rise. Those are the crimes that are given the headlines and the most airtime on the news.
Unfortunately, the news extends beyond the mainstream but extends to Main Street.
Numismatics has not been a stranger to the criminal element. If it is not embezzlers using coins to defraud people and governments, there are the counterfeits primarily coming from China. Now there are two new scams that the industry has to watch.
Counterfeiting currency is definitely not a new issue. Counterfeiting the currency that is supposed to be the most secure is something that is now hitting the mainstream, especially in countries that have adopted the use of polymer notes, is important news.
Police in Saskatoon, Saskatchewan has reported the confiscation of 72 bogus Canadian banknotes. Counterfeiters are using a combination of printed plastic sheets and physical cut-and-paste of lower denomination notes to mimic higher denomination notes.
Image released by the Saskatoon Police showing the counterfeit currency (Image courtesy of the Saskatoon Police via the Saskatoon StarPhoenix)
Within the same news feed, the Bank of England issued warnings and additional guidance after counterfeit notes were used for purchases at pubs in Lincolnshire. Many stories from the U.K. suggest that the people do not seem to like the new polymer notes, but this does not seem to help.
Bank of England wants people to watch for the color shifting ink in the quill (Bank of England image)
The Reserve Bank of Australia (RBA), Australia’s central bank and the primary developer of the polymer substrate used around the world, has found that their currency is under attack by industrious forgers. One particular forger found a plastic substrate similar to the polymer developed by the RBA. The forger bought one high-quality commercial printer from the used market and rented two others to print Australian $50 notes.
According to the reports, the $50 note was picked because it provides is common enough to be used in daily transactions (AU$50 is equivalent to US$39.06 as this is being written) and high enough of a denomination to be cost-effective for the forger. Remember, forgery may be a crime but it is a business.
A counterfeit Australian $50 note has the wrong security stripes and the star field on the right is supposed to be clear (Image courtesy of The Sydney Morning Herald)
Although these issues have not directly affected the collectible currency market, it has had an effect on the dealers when their customers pay in cash. Even with the rise of electronic transactions, many European dealers continue to do over-the-counter sales using cash. In some countries, like Germany, cash is still king even when purchasing rare coins.
While discussing these issues with a dealer based in Germany, it was reported that he will not accept large sums of cash from customers he has not done business with in the past. This dealer does not accept credit card payments over 200€ or for any bullion-based transactions. His regular customers can directly wire the funds to a special account the dealer set up. Others must use certified bank checks.
This is not to suggest wire transfers are safe. In a blog post on Kovels.com, they have been contacted by antique dealers that reported money stolen by wire transfers. According to the blog post:
The fraudsters hack your emails and insert their own email, cloned to look like an email from a trusted person, into your email stream. They then request a wire transfer — providing all needed wire instructions — for something that looks legitimate. Once a bank wire is sent, it is extremely difficult, if not impossible, to get the money back. If you need to send a wire, be sure to use “old” technology and confirm on the telephone with someone that you know!
Even though I am no longer in the information security business, it is still my obligation to remind you that EMAIL IS NOT A SECURE FORM OF COMMUNICATION! Email is the electronic equivalent of a postcard. Any message you send, unless it is encrypted, can be read, scanned, snooped, and even altered by anyone, anywhere, at any time.
“Oh, it cannot happen to me!”
I used to hear that line when I taught a senior-level college class on information security. Using a laptop connected to an overhead projector, I was able to show the class how easy it was not only to create spam but to make it look like an email was sent by someone else. I was also able to demonstrate how to read the email traffic on the local network with a few keystrokes. Are you using wireless connections? You just made stealing your information easier for the hacker.
Counterfeiting and wire fraud are not just problems for dealers. When dealers are defrauded by these criminals, they have to recover the money in some way. Insurance does not cover all losses or the extra security that will be required to protect their transactions. Prices will have to go up to cover the losses and the future costs of doing business.
The cost of doing business in this environment is not a trivial subject. While dealers of all types of collectibles want you business, fraudsters are making it difficult for dealers trust the off-the-street buyer. This makes counterfeiting and fraud a problem for everyone.