Aug 30, 2010 | commentary, education, gold, investment
At least once every month a reader will send an email note asking about the worth of coins they bought from a television shopping channel or from a company that advertises on cable television. Last week, someone asked specifically about coins bought from a company that sells gold on the show of a nationally known cable television personality.
I was surprised to learn what was being sold as investment quality coins. The person who I was corresponding with was sold Swiss and French gold coins whose values are a few percentage points over the melt value of the coin. My correspondent paid much more than the coins value. Unfortunately, the spot price of gold would have to climb over $1,500 per ounce for this person to break even on these coins.
Another email asked about the worth of State Quarter sets purchased from a television shopping channel. This person bought these sets as part of a subscription and paid three-to-five times the numismatic value for these coins. Even though the coins had nice presentation packaging, I was able to show the user online auctions where the coins are not selling for a premium that would allow him to break even.
Over a month ago, someone wrote to ask about a coin set sold by a large mail order coin dealer. As with other coins sold by this dealer, they were quality coins but were overpriced when compared to other dealers and price guides. Although the coins were in special packaging creating the illusion of a set, the price of the coins was 15-25 percent above the retail prices published in price guides.
The common denominator in these stories is that these people bought the sizzle and not the stake. They bought the special packaging or the promise of value trust the person on television, the other end of the telephone, or the pretty advertisement in a magazine. It breaks my heart to tell these people they overpaid!
Each of these people would not have made these mistakes if they had done a little research. Research is not that difficult. It starts with some basic questions: What is this coin really worth? Is this a good investment item? Who is this person I am buying from?
Over the last 10 years, there has been a surge in the publication of numismatic resources, whether it is in print or on the web. Books are being published by traditional hobby publishers and other general purpose publishers that can teach you about any coin type, how to invest in coins, and now there is a book that discusses how to sell the coin collection your grandfather left for you.
Other resources include online price guides, hobby magazines, and various websites that can help you in almost any topic in numismatics.
If that is not enough, ask questions. No question is too basic. When I taught college courses, I would remind my students that there is no such thing as a stupid questions—the only stupid question is the one not asked! Ask your favorite blogger. Ask your favorite dealer. Ask your question in a public forum that caters to coin people. Just ask!
The axiom that if the deal sounds too good to be true, it probably is not true. If you talk with someone about purchasing coins and they try to pressure you into buying immediately, do not give in to the pressure. It is your hard earned money and it is your prerogative to understand everything about how you spend that money.
Before I make any significant purchase, I will analyze the cost of the item before attempting the purchase. I select specific vendors to negotiate with and then contact them to open the conversation. When I negotiate I remember that I have the power. I may want the item, but it is my money the vendor wants. If the vendor wants my money then that person has to work with me. Otherwise, I am prepared to walk out.
If the vendor cannot answer my questions, I walk out unless they say they will find the answer. If the vendor will not answer my questions, I will walk out. If they negotiate in bad faith, I will walk out. If they treat me like they are doing me a favor, I stand up, shake their hands, thank them for their time, and then will I walk out.
Remember, you can say “no” as often as necessary. You can say “yes” only once. Make it count. Do not let the slick talking sales person sell you something that is not in your best interest. Know what you are buying and know how to just say NO!
Aug 29, 2010 | BEP, cash, commentary, economy, US Mint
“Cash is expensive, we need to be using it less.”
This self-serving quote was made by Steve Perry, executive vice president of Visa Europe, in an article that appeared in the Telegraph in the United Kingdom. To justify this statement Perry says that supermarkets in the UK are introducing cashback, a program to promote the use of credit and debit cards over cash because cash is more expensive to handle.
It may be the case in the UK that cash is more expensive to handle, but in the United States, we are seeing consumers and some small businesses moving in the opposite direction. This past week, credit reporting agencies and the credit card companies reported that the average credit card debt has fallen to its lowest point since 2002. Delinquency rates fell by 17-percent to the lowest point since the start of the current recession. Americans are buying fewer items on credit and using what income they have to pay off credit card debt.
With the economy in a stall, the U.S. Mint exceeded its 2009 output in July 2010. And even before the August Federal Open Market Committee meeting, it was speculated that the Federal Reserve would order more paper notes from the Bureau of Engraving and Printing. Since the FMOC meeting, Federal Reserve Chairman Ben Bernanke said that the Fed will do whatever it takes to stimulate the economy.
Aside from the economy another factor turning people away from credit cards is the environment created by the banks prior to the implementation of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Public Law No. 111-24 [TXT] [PDF]), also know and the Card Act. Between the bill’s passage and recent enactment, the banks have been raising fees on consumers and businesses in order to make up for what they saw as a potential loss of income. Rather than make it better for the consumers in the spirit of the Card Act, the banks showed their bald-faced greed making the using of credit cards more expensive than cash.
Even though Canada is debating on eliminating its 1-cent coin and others are pushing credit card technology onto the smart phone, small businesses are looking to save the cost of credit card handling by offering a discount for paying with cash. Credit card processing costs from three to five percent per transaction plus account fees. Some small businesses are offering their customers a discount of their credit card processing fee if they pay in cash.
Receiving a discount for paying using cash is not a new idea. There was a time, before the Card Act, when gas stations used to offer one price for cash purchases and another for credit card purchases. However, the convenience of using credit cards at the gas pump made this option unattractive. Even though the costs for using credit cards have been added to the price of gas, the elimination of this dual pricing was welcome. Recently, some independently owned stations have been offering a discount for using cash or for using the company’s credit card. The psychology of receiving a discount may make dual pricing more palatable in this environment.
As people are pulling away from credit cards, small businesses are looking to cut costs by offering discounts for paying with cash, and even with the rise in savings rates, it appears that the report of cash’s eventual demise appears to be greatly exaggerated. For numismatists, this means that our hobby will continue to grow with new, fresh material for years to come. And considering the bad economic news, this is good news. Happy collecting!
Aug 25, 2010 | BEP, fun, video
While surfing around YouTube, I came across an interesting video of a segment of the old television show What’s My Line? In this segment (of Episode #478 airing on August 23, 1959), J.A. Conlon (James A. Conlon), the Assistant Chief of the Currency and Stamp Production department at the Bureau of Engraving and Printing appeared on the show attempting to stump the panel. Watch how he does…
At the end of the segment, Conlon gives the panel members samples of the new 4-cent stamp with multi-color printing. The stamp features the flag with 49 stars since it was designed before Hawai’i became a state and the 50th star that was added to the flag on July 4, 1960.
J.A. Conlon became the Director of the Bureau of Engraving and Printing in 1967 serving until 1977.
Aug 23, 2010 | BEP, currency, video
Last week, the Bureau of Engraving and Printing, Federal Reserve Board, and the U.S. Secret Service jointly announced the next step in educating the public to protect themselves against counterfeit currency with a new video “How to Detect a Counterfeit.” The video was created to demonstrate the security features of the new $100 note.
The $100 United States Federal Reserve Note is the most counterfeited currency in the world. To stay ahead of counterfeiters, the BEP redesigned the note with security features designed to prevent digital duplication. In addition to the security thread, color shifting ink, microprinting, and portrait watermark that has appeared on other notes, the new $100 note includes a new 3-D Security Ribbon embedded in the paper and the additional use of color shifting ink by embedding a bell within the inkwell on the front of the note.
“In the video, Kelley Harris, U.S. Secret Service Supervisory Counterfeit Specialist, discusses how to identify the security features in the redesigned $100 note, including the new 3-D Security Ribbon and the Bell in the Inkwell. Viewers will also learn about common tricks counterfeiters use to fool businesses and consumers, what businesses and consumers should do if they suspect someone is trying to pass them a counterfeit note, and the U.S. Secret Service’s work to combat counterfeiting operations.”
The video is available to view on the BEP’s New Money website or for download from the multimedia page. You can find it there in case the following stops working:
Multimedia elements courtesy of the U.S. Bureau of Engraving and Printing.
Aug 22, 2010 | commemorative, legislative
After a rare case of bipartisanship (Senate passed it by unanimous connect and it passed the House of Representatives on a 419-1 vote), the President signed H.R. 2097, Star-Spangled Banner Bicentennial Commemorative Coin Act which become Public Law No. 111-232 ([Text] [PDF]).
Some historians call War of 1812 the United State’s second revolutionary war. The primary reason for declaring war on Great Britain was after years of the Royal Navy harassing or capturing merchant ships bound for France. At the time, England was in the middle of the Napoleonic Wars and was trying to prevent France from getting the supplies it needed. This lead to President James Madison to give a speech to congress explaining England’s actions. Although Madison did not call for a declaration of war, the Democrat-Republican lead congress voted to declare war on Great Britain (79-49 in the House, 19-13 in the Senate). Madison signed the declaration on June 18, 1812.
During the march to Baltimore after the British attack on Washington, D.C., the British took Dr. William Beanes as a prisoner. Beanes was imprisoned in Baltimore as the Royal Navy gathered forces for their attack on Fort McHenry in Baltimore Harbor.
Word of Beanes’s capture reached Francis Scott Key, an accomplished lawyer, prosecutor, poet, and friend of Dr. Beanes. Key, who was known as a skilled negotiator and a very temperate man, was asked by the Army to accompany prisoner exchange agent Colonel John Stuart Skinner to Baltimore to secure the release of Dr. Beanes. On September 7, 1814, Key and COL Skinner dined with British officers abroad the HMS Tonnant to negotiate the release of prisoners. ALthough Beanes was released, the British would not let the men leave the ship because they had heard about the British plans to attack Fort McHenry.
That night, Key, Skinner, and Beanes watched as the Royal Navy bombarded Fort McHenry. As the smoke cleared on the morning of September 14, 1814 after 25-hours of bombardment, Key was able to see the American flag still flying over Fort McHenry. Key was so moved by the sight that after returning home, he wrote the poem “The Defence of Fort McHenry.” The poem was published in the Baltimore Patriot on September 20, 1814.
When the poem was published, it was noted that it could be sung to the music of The Anacreontic Song, the official song of the Anacreontic Society. Shortly after publication, the music and words were published together by Thomas Carr and renamed the Star-Spangled Banner.
Throughout the 19th century, it became popular to sing this poem on July 4th to commemorate Independence Day. Its first official recognition came in 1889 when Secretary of the Navy Benjamin F. Tracy signed an order making The Star-Spangled Banner the official tune to be played at the raising of the flag.
Although it was popular that The Star-Spangled Banner be played when raising the flag, it did not receive an official declaration until 1916 when President Woodrow Wilson signed an executive order saying that it be played at all military and other appropriate diplomatic occasions. President Herbert Hoover signed the law making The Star-Spangled Banner the official national anthem of the United States on March 3, 1931.
The Star-Spangled Banner Commemorative Coin Act commemorates the bicentennial of the War of 1812 and the Star-Spangled Banner by issuing commemorative coins in 2012. These coins are to have a design “emblematic of the War of 1812 and particularly the Battle for Baltimore that formed the basis for the Star-Spangled Banner.” The program will include 100,000 $5 gold coins and 500,000 $1 silver coins.
Sales of these coins will include a $35 surcharge for the $5 gold coin and $10 for the $1 silver coin (a total of $8.5 million if the coins sellout), that will be paid to the Maryland War of 1812 Bicentennial Commission “for the purpose of supporting bicentennial activities, educational outreach activities (including supporting scholarly research and the development of exhibits), and preservation and improvement activities pertaining to the sites and structures relating to the War of 1812.”
The Maryland War of 1812 Bicentennial Commission is planning quite a few events through the anniversary of Key writing “In Defence of Fort McHenry.” Check their website for schedule and plan a trip to help celebrate.
Aug 21, 2010 | US Mint, web
Back when I wrote about the U.S. Mint joining the electronic communities of Facebook and Twitter. I also noted that the U.S. Mint was showing off a new logo. Almost a week later, the branding consulting firm Siegel+Gale issued a press release announcing new branding for the U.S. Mint they are calling Connecting America Through Coins.
The logo features a golden colored flipping coin that will be used as part of product marketing throughout the U.S. Mint product line. As previously noted, the new logo appears on the U.S. Mint’s new Facebook and Twitter pages as well as the “microsite” for the America the Beautiful Quarters Program. No other U.S. Mint asset uses the new logo. Images of the new products in the U.S. Mint&rsuqo;s online catalog show either the use of the old logo or the official U.S. Mint seal.
According to Siegel+Gale, the U.S. Mint felt there was a “general lack of understanding of its breadth of additional offerings” and “aspired to increase sales of collectable coins, increase the uptake and use of dollar coins, and develop increased public awareness of the United States Mint as the only legal manufacturer of all American coins.”
If the U.S. Mint’s issues were about branding and understanding who they are, then this is a good move. But those of us who watch the U.S. Mint knows that their problems run deeper than their branding and logo. From lackluster designs, questionable customer service, to questionable management, U.S. Mint needs more than branding to help their image. Unfortunately, if we look at the how the U.S. Mint has performed, the axiom “a fish rots from the head&rdquo becomes very profound in describing the state of the U.S. Mint.
Aug 15, 2010 | coins, love token
As I was going through my email and found a note from a reader who sent images of a 1993-D Lincoln cent where it looks like someone used a punch to create a heart design in the center of the coin (see image to the right). The reader asked if this may have been the result of the U.S. Mint trying to deface the coin and why it was placed into circulation. I was also asked if the coin had value—which is a natural question.
As the reader suggested, the markings are post minting but they were not made by the U.S. Mint. When the Mint cancels a coin they will run it through a machine that creates a waffle-like impression in the coin. Up until 2003, when the quality control officers at the U.S. Mint would remove coins from being circulated, they were separately bagged and placed under heavy guard between the Mint and the recycling center. 
The security for coins that would never be circulated was costly. In mid-2003, the U.S. Mint purchased machines that will make the waffle-like impression as a way of defacing the coins to cancel them. These coins are called waffle cancelled. Later that year, the Mint sold these coins to a dealer who encapsulated them and sold them for a premium.
My first impression was that the person who stamped the design on this coin was a modern day love token. Love Tokens are not as popular as they were in the 19th century. Love tokens are circulated coins that were smoothed by sanding or polishing on one or both sides of the coin and then a design hand engraved into the coin. They were called love tokens because they were used as gifts to show love or affection for the person. Love tokens were popular in Great Britain in the early part of the 19th century and their popularity in the United States occurred after the Civil War through the end of the century.
Love tokens were engraved on any coin found in pocket change. Depending on the financial status of the engraver, smaller denominations coins were very popular. When wages were averaging 10 to 15-cents per day, it was difficult to justify higher denomination coins to engrave.
It is typical for love tokens to have a hole punched in the top of the design to be work around the neck. More “expensive” love tokens may have a loop or bezel attached to the top so that the design stands out from the chain. Others who could afford larger, higher denomination coin and could afford to add a pin to the back to wear on a lapel. Love tokens were also made into chains and bracelets. Mothers sometimes had bracelets that had love tokens with the initials of their children.
Each love token is a personal story of a gift given in love. It is rare that these coins have a documented provenance leaving collectors to speculate the meaning behind the fascinating designs. If you are interested in love tokens, you may want to check out the website for the Love Token Society.
Like love tokens, we can only speculate as to why someone punched the heart into the coin and why it ended up in circulation. I hope its appearance in circulation does not represent a rejection of an interesting gift.
Waffle cancelled Missouri Quarter from The Columbus Dispatch.
Aug 11, 2010 | US Mint
The U.S. Mint has joined the 21st century and is now on Facebook and Twitter. Judging by the dates of their first messages, they have been using these messaging services since the end of July. Both accounts appear to be used by their public information service to announce various programs and other news of the U.S. Mint.
While comparing the two sites, it appears that the same messages are being posted on both services.
Another change that appears on both services is a new logo. Rather than using the logo that was based on the U.S. Mint seal with a red, white, and blue banner flying to the right (see image to the left), 
the new logo (right) uses a medal-like device with a flag impression that also has edge lettering that say “US Mint” placed over capital letters reading, “United States Mint” in a serif font. The new logo has appeared in email and on their “microsite” for the America the Beautiful Quarters Program. However, no change has been made to their main website and the online catalog replace the old banner logo with a black-and-white seal.
While the microsite is nicely designed, appealing, and informative, the rest of the U.S. Mint online infrastructure is in dire need of a refresh. It would be nice if they could extend the design used for the America the Beautiful Quarters Program. But it seems the U.S. Mint progresses in baby steps and this may be a small preview of what is to come—sometime in 2012 I figure.
In the mean time, if the U.S. Mint make their Twitter page (see @usmint) and Facebook wall a resource for all collectors, it will be a welcome change from how they have treated the collecting public.
U.S. Mint logo images courtesy of the U.S. Mint.
Aug 9, 2010 | commentary, grading
Dominion Grading Service is now closed. After David Lawrence Rare Coins purchased the remnants of PCI from a bankruptcy auction, relocated the service to Virginia Beach, and began to accept grading submissions in May 2008. DGS offered two new services to collectors: AuthtiVIEW, a free imaging service for coins valued over $100; and the Visual Population Report. Both services made use of technology to bring new services to their customers.
But this was not enough. Over the last two years, DGS has stagnated. There have been no new services, no new innovations, and nothing to excite their potential customers. At shows, while DLRC’s booth is a bit sedate compared to other auction companies, DLRC did little to improve and promote DGS. DGS acknowledge their stagnation noting that “both PCGS and NGC have made great strides and improvements to their grading technologies and practices and we no longer feel that our services are needed.”
In a previous post, I discussed that the long term health and existence of other grading services matter. It is important for other grading services to exist because competition is good. Competition makes every service better. Competition forces grading services to innovate to try to distinguish themselves from the others in their field. This is good for the consumer who will get a better value for their fees.
There was a lot DGS could have done to distinguish themselves from the other services with only expenses in technology. Yes, I know the economy is not doing well. I also know that most MBA programs teach that building the infrastructure will pay dividends in the future. It takes a little imagination and marketing to break through the crowd and distinguish themselves from other serves. John Feigenbaum, president of DLRC and DGS whose biography says that he earned a Bachelor of Science degree in Marketing Management from Virginia Tech (not a slouch school!), should have known better rather than let the service stagnate until it withered away almost unnoticed.
Aug 9, 2010 | coins, national park quarters, US Mint, video
On July 29, 2010, US Mint director Ed Moy introduced the Yosemite National Park Quarter at the park in California. The coin fathers the image of El Capitan, the 3,000-foot vertical rock formation that is prominent formation that looms over Yosemite Valley.
Prior to being discovered by European-Americans in 1833, the Ahwahneechee people inhabited Yosemite Valley. As the gold-rush expanded the non-native population, U.S. troops burned Ahwahneechee villages in 1851, eventually driving them out of the valley. Within a few years, the lack of gold lead to entrepreneurs to use early photographs of the area to turn the area into a tourist destination.
By 1864, the commercial use of the area became a concern. Prominent citizens lobbied congress to pass a bill to declare the area a national park. The bill creating the Yosemite Grand was signed by President Abraham Lincoln on June 30, 1864. Yosemite Grant was managed by the Army until the National Park Service was created in 1916.
A coin exchange and roll sale followed the launch ceremony.
The following video of the launch ceremony was released by the U.S. Mint:
You can find the B-Roll package at NewsInfusion.com.
Coin image courtesy of the U.S. Mint.
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