Apr 27, 2012 | celebration, Eagles, silver, US Mint
The San Francisco Branch of the U.S. Mint first opened in 1857 to serve the coinage needs caused by the California Gold Rush. With the population growth in California and the demand for coins the Mint out grew the building and built a new Mint that was opened in 1874.
The new building was built beyond specification to be secure based on the known risks of the times. One worry about the new building was preventing the ability for someone to break into the building by tunneling into the basement. To prevent this, the foundation and basement were made with granite. Although the above ground structure was built using sandstone, the building earned the title “Granite Lady” following the 1906 San Francisco Earthquake when it survived with only a few exterior cracks.
The Granite Lady was the only building in its area to survive the destructive force of the quake. After the earthquake, the Mint Superintendent Frank Leach and his staff used the building and the grounds to assist with the rescue and housing effort after the earthquake. A tent city was built around the Mint and stayed until there were places for them to move.
Production continued with coins bearing the familiar “S” mintmark. Amongst the coins struck at The Granite Lady is the famous 1909-S VDB Lincoln Cent. The year after producing only 309,000 1908-S Indian Head Cents, the San Francisco Mint geared up to increase the production of the newly introduced Lincoln Cent. As the new coins landed in circulation, there was an outcry over the large “V.D.B” initials on the reverse for designer Victor David Brenner, the Mint stopped production of the coins. The Mint in San Francisco stopped after production of 484,000 of these cents, making it one of the most desired collectibles and a key date in the Lincoln Cent series.
As what happened after the San Francisco Branch Mint opened, they began to outgrow The Granite Lady. At the same time that congress authorized $524,000 to build the Bullion Repository at Fort Knox in 1935, they authorized $1.225 million to build the new San Francisco Mint.
The state of the art facility was built as a fortress with two-foot reinforced concrete walls to protect the vaults, a pistol range on the fifth floor, and tear gas pipes throughout the building for security. Also included in the construction was a generator to operate the electricity in case the power was cut to the building. When it opened, there was a plumbing shop, carpentry shop, and a blacksmith shop to support operations.
San Francisco’s new Mint opened in 1937 and became fully operational by 1938. It continued to strike circulating coins until 1955. In 1962, San Francisco was “downgraded” to an assay office. As an assay office, it struck circulating coinage starting in 1968 and ending in 1974. The San Francisco facility continued to strike proof coinage and added striking circulating Susan B. Anthony Dollars from 1979 through 1981.
Since 1981, the San Francisco Mint has struck Lincoln Cents for circulation to supplement the output of the Philadelphia Mint. It is not known how many cents San Francisco produced since their coins contained no mint mark and their inventory was included in the general reporting by the U.S. Mint without distinguishing between the facilities.
The San Francisco Assay Office was officially granted mint status again on March 31, 1988 as part of Public Law No. 100-274. That law also granted mint status to Silver Bullion Depository at West Point.
To celebrate the 75th Anniversary of the “new” San Francisco Mint, the U.S. Mint will sell a two-coin American Silver Eagle Proof set struck at the San Francisco Mint featuring the “S” mintmark. The set will include one regular proof and one reverse proof coin in a special presentation case.
In an attempt to avoid the problems of the past, the U.S. Mint will take pre-orders for the set and strike as many as collectors purchase. The U.S. Mint is likely to limit the number of sets sold during the pre-sale period, but there will be no limits on the number of sets produced.
The San Francisco Mint will begin to strike American Silver Eagle Proof coins on May 11 and will host a public ceremony on May 15. This set be on sale only during the period of June 7, 2012, to July 5, 2012 with mintage limits is being reported as “to demand.” Price has yet to be announced.
The American Silver Eagle Reverse Proof has to be one of the best looking coins produced by the U.S. Mint in the last 50 years. Aside from using the Adolf A. Weinman Walking Liberty design, which is one of my favorites, the shiny relief over the matte field really makes the design pop.
With the current American Silver Eagle Proof coin selling for $59.95, it is possible that the San Francisco set would be priced around $120. However, I think the set price may be set to $99.95 to increase sales and show some good will to collectors, especially those that were shutout of purchasing the 25th Anniversary Silver Eagle Set.
As an aside, the 100,000 unit 25th Anniversary set sold for $299.95. Recent price guides show that the set is selling is worth $825. Since the U.S. Mint plans to strike “to demand,” it is unlikely the San Francisco Anniversary set will see that kind of increase on the secondary market.
Image of the San Francisco Mint after the 1906 Earthquake courtesy of the Library of Congress.
Image of the new San Francisco Mint courtesy of Wikipedia.
Image of the San Francisco 75th Anniversary Silver Eagle Set courtesy of the U.S. Mint.
Feb 1, 2012 | Eagles, silver, US Mint
You might have read that the U.S. Mint surveyed purchasers of their 25th Anniversary American Silver Eagle sets to ask whether they would buy different options of the coins. Amongst the options surveyed include coins minted in Denver, reverse proofs, and a high relief coin.
Mint Director of public affairs Tom Jurkowsky was quoted by Numismatic New as saying, “Just because a question is presented doesn’t mean that a product would be offered.”
I was one of those asked by the U.S. Mint to participate in the survey. As I was answering the question I was excited because the American Silver Eagle is my favorite modern coin. Aside of being 40mm with one troy ounce of beautiful silver, Adolph A. Weinman’s Walking Liberty design is one of the best designs to be featured on a United States coin. With the John Mercanti designed heraldic eagle on the reverse, the coin screams of being an American coin.
Later in the day, I received a product notice from the Royal Canadian Mint for yet another non-circulating legal tender (NCLT) collectible. That is when I realized that the Royal Canadian Mint produces a lot of NCLT coins including ones that celebrate Canada with the use of the maple leaf. Don’t get me wrong, I love Canada. I collect Canadian circulated coins and I am a member of the Royal Canadian Numismatic Society. But the Royal Canadian Mint just produces too many products.
While I sometimes look at some of the RCM’s products and think that the U.S. Mint could produce coins of the same themes if congress would release their shackles, I also know that the overload of products from the RCM appears to cheapen their product offerings.
Additional American Silver Eagles would be nice, but I question whether adding additional options would push the U.S. Mint into overload? Even though the reverse proof American Silver Eagle is a beautiful coin, does it really have to be produced every year? What is wrong with producing the coin for special anniversary sets?
After seeing the reverse proof and the U.S. Mint’s previous high relief coin, I think they would produce a phenomenal coin. But why waste the design on an ordinary release. Why not wait until 2016 and produce a high relief American Silver Eagle to commemorate the 100 year anniversary of the first release of the design on the Walking Liberty Half Dollar? That would make the high relief coin special. In fact, since it is beyond the 25th year of the design, why not produce the reverse of the 2016 high relief American Silver Eagle using the same reverse as the Walking Liberty Half Dollar?
I hope the excitement over the survey calms down and that cooler heads will prevail.
Oct 28, 2011 | Eagles, silver, technology, US Mint
After going on sale at noon, the U.S. Mint changed the catalog page for the 2011 American Eagle 25th Anniversary Silver Coin Set to say the sets have been SOLD OUT at 6:00 PM.
Those of us who were able to order sets found that the U.S. Mint early was faced with slow response time at the website and busy signals on the phone. In fact, the phone system was the most frustrating. After calling 1-800-USA-MINT, the interactive voice response (IVR) system answered and presented the options. After pressing “1” to order products, we were told “Your call may be monitored for quality assurance purposes.” Sometimes, it was followed by a message saying that I was selected to participate in a survey after the call. But I never got to the survey when the call reverted to a busy signal.
The website was no better. Many times it did not respond. When it did, users could only get back to the front page. After being able to select the sets and change the quantity, trying to check out became an act of futility. For the first hour, if you could get back to the online shopping cart, requests to checkout was not responded to by the U.S. Mint servers.
Fifty minutes into this adventure, my call sailed past the intro to actually place me on hold. A few moments later, a pleasant woman answered the phone and helped me place my order for five sets, the household limit.
Once the order was completed, I turned back to the computer and continued trying to place an order anyway. After trying for 90 minutes, I gave up and decided to have lunch.
U.S. Mint ordering limits prevented a quicker sellout. Two friends were able to order sets by phone at 3:00 PM. They called from work and each placed their order with the same representative.
Although I do my work for a different government agency, we always attempt to architect the systems, including the VRS, for the worst case scenario. Although predicting the maximum load and how to build systems is more of an art than a science, there are tools that helps the performance engineers’ job easier. The U.S. Mint should consider finding system engineers who come with performance engineering support to fix their systems.
Now that I have that off my chest, I am looking forward to seeing this set, especially the reverse proof. The reverse proof was the highlight of the 20th Anniversary set and should be the highlight of the 25th Anniversary Set.
Oct 22, 2011 | Eagles, silver, US Mint
On Thursday, October 20, the U.S. Mint not only confirmed that the American Eagle 25th Anniversary Silver Coin Set at noon Eastern Time (ET) on October 27, 2011, but that the price was set at $299.95 with a limit of 5 sets per household. The U.S. Mint caveated the price noting that the price is subject to change depending on the price of silver.
Earlier this week, I attempted to predict the price of the set. At that time, the guess was $368.95 with the price of silver at $42—which was the price when I did the calculations, not posted the article. If we give me the approximate $10 drop in silver ($50 for five coins), and take away the 33-percent markup ($16.50) should have lowered my guess to $312.45. That would be only a $13.50 difference. So my guess was only significantly off by my assumed price of silver.
Spin aside, I am looking forward to this set. Hopefully, their website will stay up long enough to allow me to place my order!
Image courtesy of the U.S. Mint.
Oct 17, 2011 | Eagles, silver
Several stories have confirmed that the American Eagle 25th Anniversary Silver Coin Set will go on sale October 27, 2011. Shipping is expected to begin in late November.
The United States Mint American Eagle 25th Anniversary Silver Coin Set will include five one-ounce American Eagle Silver Coins:
- one proof coin from the United States Mint at West Point
- one uncirculated coin from the United States Mint at West Point
- one uncirculated coin from the United States Mint at San Francisco
- one reverse proof coin from the United States Mint at Philadelphia
- one bullion coin
All five coins will be mounted in a custom-designed, highly polished, lacquered hardwood presentation case accompanied by a Certificate of Authenticity.
The U.S. Mint plans to produce 100,000 of these set with a limit of 5 sets per household. The prices has still not been set.
If we were to speculate on the potential price of this set, we can look at the cost of the 20th Anniversary American Silver Eagle Set. In August 2006, when the 20th Anniversary set when on sale, $100 purchased a 2006-W Proof, 2006-W Burnished, and 2006-P Reverse Proof coins. That year, the U.S. Mint sold the 2006-W Proof Silver Eagle for $27.95 and the 2006-W Burnished Eagle for $19.95. Using the proof price for the reverse proof, the total cost was $75.85. By pricing the set at $100, that is a 33-percent markup.
For the 25th Anniversary American Silver Eagle set, there are two proof coins currently selling for $29.95, two uncirculated coins now selling for $50.95, and the current price of silver is $42—but these calculations will use the price of the uncirculated coins currently on sale at the U.S. Mint as a basis for this speculation. With these prices, the total cost of the coins are $272.75. Given that the 20th Anniversary set was marked up about 33-percent, the total cost with the mark-up is $362.75.
Adding to the costs will be the “custom-designed, highly polished, lacquered hardwood presentation case accompanied by a Certificate of Authenticity.” This differs from the cardboard-based packaging that was used for the 20th Anniversary set. Aside from the labor, the U.S. Mint has to account for materials. Therefore, the speculative cost of the set will be $368.95.
Remember, you heard it here first!
Aug 19, 2011 | bullion, Eagles, silver, US Mint
The U.S. Mint announced that they will issue a limited-edition five coin silver set to commemorate the 25th anniversary of the American Eagle program.
The United States Mint American Eagle 25th Anniversary Silver Coin Set will include five one-ounce American Eagle Silver Coins:
- one proof coin from the United States Mint at West Point
- one uncirculated coin from the United States Mint at West Point
- one uncirculated coin from the United States Mint at San Francisco
- one reverse proof coin from the United States Mint at Philadelphia
- one bullion coin
All five coins will be mounted in one custom-designed, highly polished, lacquered hardwood presentation case accompanied by a Certificate of Authenticity.
The U.S. Mint plans to produce 100,000 of these set with a limit of 5 sets per household. They anticipates accepting orders in late October. Price has not been set.
The reverse proof American Silver Eagle appeared in the 20th anniversary set in 2006. It is am impressive looking coin of the Adolph A. Weinman’s Walking Liberty design. I will definitely be working the phones and online to order sets of these coins.
Image courtesy of the U.S. Mint.
Aug 11, 2011 | gold, markets, silver
With the politics of the economy turning volatile, I tried to keep out of that discussion on this blog to keep the discussion to coin-related issues. But with the price of gold climbing to its highest nominal rates of all time, it is difficult to ignore the market. As I write this, gold is current 1793.20 per troy ounce on the spot market.
Market volatility has been blamed on many fronts. It started with Standard & Poor’s, the rating agency that gave top grades to derivatives that caused the market failures in 2008, downgrading the credit rating of the United States to AA+ from AAA. The word came across the pond that the PIIGS of Europe may not only be too big to fail, but too big to help. The PIIGS are the five Eurozone nations who are either in economic collapse or near one: Portugal, Italy, Ireland, Greece, and Spain.
The more volatile the markets are, the more investors run for gold running up the prices.
But if you think the prices are high, consider what happened on January 18, 1980 when gold closed at 850.00 per troy ounce. That run up of gold came during the time that the Hunt Brothers were trying to corner the silver market as a reaction to the down economy and the rise in the solver market. Adjusted for inflation, $850 in 1980 would be equivalent to $2,328.44 in today’s dollars. If this does not dampen you excitement over the price of gold, you could watch the argument between “experts” who think $2,000 per ounce is possible versus others saying that gold could plummet in value. Consult a profession before you make any investment.
Silver has not faired as well as gold. While trying to figure out why, I found a lot of information that while both metals have industrial applications, gold is seen as a financial metal while silver is more plentiful and is considered a more industrial metal. Rather than investors trying to have silver keep pace with gold, the way gold kept pace with silver in 1980, the old 15-to-1 and even 25-to-1 silver to gold ratios are no longer valid measures. At the current 39.29 per troy ounce, the ratio is 44-to-1. Some believe that 35-to-1 and higher may be the new “normal.”
For a little perspective on the price of silver, it is currently training at 39.29 per troy ounce, down from its high of 48.70 on May 28. That did not pass the nominal close of 52.50 reached on January 7, 1980 when the Hunt Brothers tried to corner the silver market. Adjusted for inflation, the Hunt Brothers ran the price to the equivalent of 143.82 in today’s dollars. Even at a 25-to-1 ratio, the price of gold would have to climb to $3,575 per troy ounce before the value of silver breaks 1980’s records.
In 1980, the Dow Jones Industrial Average closed at 832.00 on January 7 and 867.15 on January 18 before dropping in March. It would take the market until November 20 to close at over 1000 for the first time in its history. After dropping back and flirting with 1000 points a few more times, it would take until 1982 before the market climbed and stay over 1000 points.
What have we learned from this look at history? Not much. At first glance it looks like the economy is not as bad as it was in 1980. But that history was caused by market manipulation. Will history repeat itself? Time will only tell.
Aug 3, 2011 | bullion, Eagles, silver, US Mint, video
Have you ever wondered about the production process for the American Eagle Silver Bullion Coins? American Eagle silver bullion coins are struck at the U.S. Mint facility at West Point located near the U.S. Military Academy. Originally built as a bullion depository, the facility strikes silver, gold, and platinum bullion and proof coins. It is not open to the public.
You can take a video tour of the facility (embedded below) through the U.S. Mint’s Mint TV YouTube channel. Jennifer Butkis, Production Manager at the West Point Facility guides the viewer through the minting process. At the end Tom Dinardi, Deputy Plant Manager, praises the work of the people at the facility.
Enjoy the video:
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
May 23, 2011 | commentary, gold, policy, silver
In recent months, there has been a call to either push for a gold standard or watch as states introduces bills coin their own money in response to the economy. On the extreme, Rep. Ron Paul (R-TX) introduced a bill that proposes repeal legal tender laws that will essentially bring the country back to the chaos of the United States pre-constitutional economies. Many of these arguments are interesting with some good and bad ideas, but they do not take into consideration issues of basic math.
If a proposal to move the United States to either a gold, silver, or bi-metal standard passes, we will probably see the biggest economic contraction in history because there is not enough gold or silver in the country’s storage in order to cover the total money supply.
First, in calculating the country’s value of gold and silver holdings, we find that according to the 2010 United States Mint Annual Report [PDF], there are 245,262,897 troy ounces of gold stored in the United States Bullion Depository in Fort Knox, Kentucky. This amount has not changed in recent memory. In the Mint facility at West Point, nicknamed the “Fort Knox of Silver,” the country owns 7,075,171 troy ounces of silver. But what they worth?
Determining the worth of the metals in storage is an interesting exercise. If we valued the government’s total holdings in accordance with statutory requirements, gold is valued at $42.22222 per fine troy ounce (see 31 U.S.C. § 5117(b)) and silver is values at least $1.292929292 per fine troy ounce (see 31 U.S.C. § 5116(b)(2). Although these values are much lower than what the markets value these metals, when the federal government counts its assets, gold and silver is based on numbers written into law.
Valuing these metals based on their market value, gold is worth $1,514.20 per troy ounce and silver is $35.16 per troy ounce (New York prices when the market closed on May 20, 2011). These values significantly raise the value of the government’s holdings. Using these numbers we can calculate the United States’ total holdings as:
|
Gold Statutory Value |
Gold Market Value |
Silver Statutory Value |
Silver Market Value |
| Inventories (troy ounces) |
245,262,897 |
245,262,897 |
7,075,171 |
7,075,171 |
| Valuation per Troy Ounce |
42.2222 |
1,513.20 |
1.292929292 |
35.16 |
| Total Value (in millions) |
$ 10,355 |
$ 371,205 |
$ 9,148 |
$ 247,985 |
| Total Statutory Value: |
$ 10,365 million |
| Total Market Value: |
$371,453 million |
This means that the amount of money the economy can have is over $371 billion. This seems reasonable until we look at the total amount of money that in economy.
Economists have several ways of calculating the money supply in an economy. The Federal Reserve used M1 and M2 as their basis of analysis. M1 is a narrow measure of money’s function as a medium of exchange. In other words, it is the purchase power of all liquid or near liquid assets. M2 is a broader measure that reflects money’s function as a store of value. For the Federal Reserve, M1 is basically the supply of ready cash. M2 consists of M1 plus other deposits that are not as readily available, such as savings and retirement accounts. The economists at the Federal Reserve are constantly updating these numbers to determine how well the economy is doing.
According to the Money Stock Measures published by the Federal Reserve on May 19, 2011, at the end of April 2011, the seasonally adjusted M1 money supply was $1,901 billion meaning that there is just under $2 trillion of ready cash in the economy. The M2 money supply, the count of all cash, is $8,945.7 billion.
When calculating what is needed to back the United States currency with precious metals, this is where basic mathematics shows the potential failure of the policy. If such a policy requires the instant conversion of all ready cash (M1) to be backed by metals, only the first $371 billion of the nearly $2 trillion could be converted. In other words, in order to back every dollar with the country’s store of metals, we are over $1.6 trillion dollars short. To cover the entire money supply (M2), there is a $7.2 trillion shortfall. Simply, there is only enough gold and silver to cover about 5-percent of all cash and equivalents in the United States economy.
In order to break even on the conversion, the country would either have to acquire precious metals on the open market, issue $7.2 trillion in bonds that had to be backed by precious metals to a world that does not have those kind of assets, or find a way to revaluate the dollar so that the total money supply can be covered by the $371 billion in physical assets.
And this only covers current assets. It does not account for any growth!
Regardless of how the metals advocates justify their positions, it would be impossible to back the entire economy with down payment of 5-percent.
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