After a late arrival in New Orleans, I walked the block over to the convention center to enter the bourse floor. Hall G of the Ernest N. Morial Convention Center is a big convention center hall that does not feel “full.” Sure, the National Money Show is a smaller show than others including the World’s Fair of Money, but it does allow for a different group of people to come in and learn more about numismatics.
Since my trip to the show is largely to campaign for the Board of Governors elections, I started to meet and talk with members around the floor. I had taken the opportunity talk with a few people I know and introduce myself to others.
But that does not mean I did not do some looking around.
The biggest news I learned is that the U.S. Mint is planning on issuing a reverse proof American Gold Buffalo later this year in honor of the design’s 100th anniversary. A sample can be seen at the U.S. Mint booth at the show and, of course on Pinterest. The image was taken through the glass of the case it is being display within. On Friday, I will try to take a picture of the coin with the case open.
On seeing the reverse proof American Buffalo coin I was stunned as to how beautiful it is. It has an elegance that you cannot see in a picture. The coin will be released later this year. It will give us time to put some money aside to buy at least one version. If you buy no other gold coin this year, you should save to buy this one. I guarantee that you will not be disappointed.
Although the sales of the 2013 American Eagle West Point Two-Coin Silver Set went on sale today, the U.S. Mint only had a sample at the show. All sales are being made on line or via the telephone. You can see an image on Pinterest. I will try to take a better picture when I do one of the American Buffalo gold reverse proof since both are in the same display case.
Aside from buying a new loupe because I left mine at home, I just found a few New York-related tokens including a New York City subway token where the cutout “Y” is off-center.
One of the great things about coming to an ANA show is to see people, meet new people, and just have a great time. Some of us went to the French Quarter for dinner. After dinner, we walked a few blocks to the French Market for café au lait and beignets at Café du Monde. Thus, the tradition I started as a college student in 1980 continues—every trip I have ever made to New Orleans included a visit to Café du Monde.
Friday will be some Money Talks sessions and end with a reception for Congressman Steve Scalise (R-LA). Scalise is one of the sponsors for the newly introduced H.R. 1849, the bill to update the Hobby Protection Act. The same bill that did not get a hearing during the last session.
Keep a watch on Twitter and Pinterest for reports from the show.
It was reported in the numismatic press but not formally announced by the U.S. Mint that they filed a notice that appeared in the Federal Register (78 FR 11954) raising precious metal prices. The new prices, which are as much as 30-percent higher than the previous became effective as of noon (ET) on Wednesday, February 27, 2013.
It was noted in the U.S. Mint’s annual report that seigniorage on precious metal products were lower in 2012 than in years past. This move appears that the U.S. Mint is trying to make up for that lost revenue.
Over the last few weeks there have been a public drumbeat for the U.S. Mint to strike a $1 Trillion platinum bullion coin to resolve part of the country’s debt issues. Regardless of the story saying that this should be done, the concept is that the coin would be deposited in the Federal Reserve and it would instantly generate $1 Trillion in profit (seigniorage) that would then be deposited in the Treasury general fund.
Regardless of the side of the political spectrum you are in this topic, it will not work.
The United States Code (U.S.C.) is the codification of the laws of the United States. It is divided into 51 titles each covering one general topic. References to the law are made by providing the title number, followed by “U.S.C.,” then the section of the law. Subsections are added using parentheses after the section. All of the laws governing the U.S. Mint are under Title 31. When talking about what coins the U.S. Mint may be allowed to strike, you would find those laws in Title 31 Section 5112 (31 U.S.C. §5112).
First question is whether it is legal for the U.S. Mint to strike the $1 Trillion coin. Although there are as many answers as there are pundits, everyone points Title 31, Section 5112, paragraph “k” (31 U.S.C. § 5112(k)) that reads as follows:
The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.
This law was passed by congress under their authority in Article 1, Section 8 of the U.S. Constitution that says “The Congress shall have Power… To coin Money, regulate the Value thereof, ….” The law’s intent was to give the U.S. Mint the authority to issue the American Eagle Platinum Bullion and Platinum Proof coins. American Eagle Platinum coins have a $100 face value and sell for a premium over the market price of platinum and taking into consideration coin’s production cost. However, the law does not restrict the issuance of the platinum coin to the American Eagle program.
But is it constitutional? The argument from John Carney of CNBC says it is not by twisting a ruling by the Supreme Court. Carney cites the case Whitman v. American Trucking Assns., Inc. (531 U.S. 457 (2001)) in saying that “the Environmental Protection Agency rule making authority was too broad because Congress had failed to provide ‘intelligible principle’ to guide the agency.” Unfortunately, like a lot of people, Carney reads the headlines and not the majority opinion. In the majority opinion, Justice Antonin Scalia wrote the law “does not permit the Administrator [of the EPA] to consider implementation costs” which is against previous precedent because the Clean Air Act, which was under question, “often expressly grants the EPA the authority to consider implementation costs, a provision for costs will not be inferred from its ambiguous provision.”
In other words, the Supreme Court said that because there are conflicts in the law. The “intelligible principle” is that Congress cannot delegate partial authority over one part of a law where other parts have a requirement to consider other circumstances. In other words, the Supreme Court is saying that Congress has to be consistent in delegating its authority.
Could 31 U.S.C. § 5112(k) be interpreted in the same manner? It is possible for the Supreme Court to declare the law unconstitutional, but if they do so they would also have to rule that the law that allowed the U.S. Mint to create the 2009 Ultra High Relief Gold Coin unconstitutional. According to 31 U.S.C. § 5112(i)(4)(C):
… at the same time the Secretary in minting and issuing other bullion and proof gold coins under this subsection in accordance with such program procedures and coin specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.
Under both 31 U.S.C. § 5112(k) and 31 U.S.C. § 5112(i)(4)(C), the Secretary can authorize the U.S. Mint to strike any denomination platinum or gold coin with the value of $1 Trillion. Since there is no ambiguity or contradictions that would be able to use Whitman v. American Trucking Assns. as a precedence, the constitutionality should not be in question.
If the Secretary could mint and issue a $1 Trillion coin, then the Secretary could mint 17 such coins that could theoretically be used to pay off the country’s debt and give the country a positive balance for the first (and only) time since 1835 under President Andrew Jackson.
For discussion sake, let us say that the Secretary authorized the U.S. Mint to produce a $1 Trillion coin. Who is going to buy the coin?
If the concept is to use the profit (seigniorage) from the sale of the coin, whether it is made of gold or platinum, the coin has to be sold in order for there to be a profit. If the government would just deposit a $1 Trillion coin in the Federal Reserve, then where is the profit for the government? In order for a coin to become legal tender, it has to be bought from the government for at least its face value unless the law allows otherwise (see the American Eagle Bullion program and any of the commemorative programs). The U.S. Mint does not consider a coin to be legal tender until it receives an appropriate deposit of bullion or other forms of legal tender.
It this concept of legal tender that has been behind the government’s position that because the 1933 Saint-Gaudens Double Eagle coin was not paid for by a depositor (part of which is required in 31 U.S.C. § 5122), they are government owned coins (31 U.S.C. § 5121) and not legal tender. This concept has been upheld in the history of the 1933 Saint-Gaudens Double Eagles including the settlement over the Fenton-Farouk coin that sold for $7,590,020 with $20 going to “monetize” the coin.
Most recently, Judge Legrome D. Davis (U.S. District Court for Eastern Pennsylvania) confirmed the legal tender status of the 10 Double Eagles that Joan Langbord allegedly found in a box once owned by her father, infamous Philadelphia jeweler Israel Switt who is considered one of the central figures in the coins removal from the U.S. Mint. In Lanbord et al v. U.S. Treasury (Civil Action No. 06-5315), Judge Davis’s opinion cites past cases including the government’s own case against Israel Switt in 1934 for not forfeiting recalled gold and the previous return of 75 coins attributed to him. His opinion effectively confirms the U.S. Mint’s argument that once it creates a coin it is not legal tender and a liability on their balance sheet until the coins is bought.
If the coin is has to be paid for by a depositor before it can become legal tender, who will buy a $1 Trillion coin?
If the coin is just deposited with the Federal Reserve, there will be a $1 Trillion liability on the government’s balance sheet. In order to make the books balance, the Department of Treasury would have to sell debt bonds to make up the difference and that would add $1 Trillion to the national debt.
If the coin is bought by the Federal Reserve, then the Fed will have to pay $1 Trillion to the U.S. Mint for the coin reducing its overall working capital by $1 Trillion. Paying for a $1 Trillion that could not be used will just transfer the debt from the general treasury to the Federal Reserve. Since the Federal Reserve is in charge of managing the country’s money supply, the net effect will be to reduce the money supply by $1 Trillion that will cause the economy to shrink—any time you artificially remove money from the economy it will shrink which will also weaken the buying power of the U.S. dollar.
Transferring the debt away from the general fund might look good on paper but the effect will shrink the economy and cause more problems than even considering the constitutionality of doing this.
We end numismatic 2012 almost the same way as we began, discussing what to do about the one-dollar coins. The over production lead to a quite a number of bills introduced in congress to try to fix the perceived problem but none ever made it to a hearing, let alone out of a hearing. Rather, the U.S. Mint hired Current Technologies Corp. (CTC) to perform an alternative metals study required by congress.
When the U.S. Mint finally published the report and a summary they made a recommendation to study the problems further because they could not find suitable alternatives to the current alloys used. While reading the summary gives the impression that the request is reasonable, the full 400-page report describes the extensive testing and analysis that the U.S. Mint and CTC performed leaving the reader curious as to why they were unable to come to some sort of conclusion—except that there is no “perfect” solution. This is a story that will continue into 2013 and be on the agenda for the 113th congress when it is seated on January 3, 2013.
The other part of the discussion is whether or not to end the production of the one-dollar Federal Reserve Note. It was the last hearing before the House Financial Services subcommittee on Domestic Monetary Policy and Technology for Rep. Ron Paul (R-TX) and the 112th congress that will certainly carry over into 2013.
This does not mean the Bureau of Engraving and Printing is without its controversy. In order to comply with the court order as part of American Council for the Blind v. Paulson (No. 07-5063; D.C. Cir. May 20, 2008 [PDF]) and the subsequent injunction (No. 02-0864 (JR); D.C. Cir. October 3, 2008 [PDF]), the BEP has been working to provide “Meaningful Access” to United States currency.
Secretary of the Treasury Timothy F. Geithner approved the methods that will be used to assist the blind and visually impaired to U.S. currency on May 31, 2011. In addition to examining tactile features, high contrast printing, and currency readers, the BEP issued a Request for Information for additional information to implement their plan. The BEP will be participating at stakeholder organization meetings to socialize and refine their plans. There will probably be few announcements before the conventions of the National Federation of the Blind and American Council of the Blind this summer.
Another building controversy from the BEP is whether the redesigned $100 notes will find its way into circulation. Introduced in April 2010, full production has been delayed because of folding during the printing process. The situation has to be so severe that the BEP has not announced a new release date and delayed releasing the 2011 CFO Report [PDF] to the end of Fiscal Year 2012 while finding a way to bury the scope and costs of the delays. Will the redesigned $100 Federal Reserve Note be issued in 2013? Stay tuned!
Staying with currency issues, there should be a new series of notes when a new Secretary of the Treasury is appointed. It is known that the current Secretary Timothy F. Geithner wants to pursue other options. If the BEP follows its past practice, notes with the new Secretary of the Treasury’s signature would be Series 2009A notes. There have been no reports as to whether Treasurer Rosie Rios will continue in her position.
As for other products, the BEP will continue to issue specially packaged notes using serial numbers that are either lucky numbers (i.e., “777”) or ones that begin with “2013” as part of their premium products. Of course they will continue to issue their sets of uncut currency.
Another carry over from 2012 will be whether the U.S. Mint will issue palladium coins that were authorized by the American Eagle Palladium Bullion Coin Act of 2010 (Public Law No: 111-303 [Text] [PDF]). The law requires that the U.S. Mint study of the viability of issuing palladium bullion coins under the Act. That report was due to congress on December 14, 2012 but has not been made public at this time.
Bibiana Boerio was nominated to be the Director of the U.S. Mint.
One final bit of unfinished business from 2012 is the nomination of Bibi Boerio to be the 39th Director of the U.S. Mint. The former Chief Financial Officer of Ford Motor Credit and Managing Director of Jaguar Cars Ltd. has recently been a Special Advisor to the President of the Detroit Regional Chamber of Commerce while waiting for the Senate to confirm her nomination. The Senate will have quite a few presidential nominations on its agenda that will he taken up in the new congress.
Other than the higher prices for silver products, the U.S. Mint should not generate controversies for its 2013 coin offerings. There will be no changes for the cent, nickel, dime, and half dollar with the half dollar only being struck for collectors since it has not been needed for circulation since 2002. These coins will be seen in uncirculated and proof sets with silver versions for the silver sets.
There has been no confirmation from the U.S. Mint whether they will strike San Francisco “S” Mint quarters for the collector community as they did in 2012.
American Eagle coin programs will continue with the bullion, collector uncirculated, and proof coins for both the silver and gold. The American Eagle Platinum bullion coin will continue to use its regular reverse while the American Eagle Platinum Proof will continue with the Preamble Series. The Preamble Series is a six year program to commemorate the core concepts of the American democracy as outline in the preamble of the U.S. constitution. For 2013, the reverse will be emblematic of the principle “To Promote the General Welfare.” The U.S. Mint has not issued a design at this time.
Currently, there are no announced special products or sets using American Eagle coins and no announced plan for special strikings such as reverse proofs or “S” mint marks.
Last week, the U.S. Mint published their product schedule for the rest of the month and the first quarter of 2013. So for this week’s poll, which 2013 coin are you most interested in?
American Silver Eagle Proof
While I could have allowed more than one answer, I decided to limit you to just one of the programs that change plus the American Eagle coins. For me, I will always buy at least one example of the silver bullion, uncirculated, and proof coins each year to keep my nearly complete collection going—missing only the 1995-W proof.
For the changing programs, the 2013 Presidential $1 Coins will honor the presidencies of William McKinley (the 25th President), Theodore Roosevelt (26th, whose “Pet Crime” gave us better coin designs), William Howard Taft (27th, the only president to become Chief Justice of the Supreme Court), and Woodrow Wilson (28th president). Although there are interesting stories about earlier presidents, “modern” United States history is usually taught beginning either McKinley or Roosevelt—which is unfortunate because many people could learn a lot from post-reconstruction politics.
2013 Native American Dollar Reverse Design
One of the most under-appreciated designs have been those for the Native American $1 Coin. Using the obverse of the original Sacagawea Dollar, the reverse has been changing since 2009 to honor the history and other contributions made by native Americans. Aside from honoring their important contributions, the designs have been wonderful. In 2013, the reverse design commemorates the Delaware Treaty of 1778. The design features a turkey, howling wolf, and a turtle as the symbols of the clans of the Delaware Tribes, and 13 stars to represent the colonies. Not only are these great designs but they make wonderful education pieces that should gain more attention when congress does the right thing and eliminates the paper dollar note.
2013 Girl Scouts of the USA Centennial Silver Dollar
The 2013 Girl Scouts of the USA Centennial Silver Dollar honors the organization’s founding by Juliette Gordon Low in Savannah, Georgia on March 12, 1912. Low founded the Girl Scouts a year after meeting Sir Robert Baden-Power, founder of the Boy Scouts and Girl Guides in England. When Low returned to Savannah, she put the concept in motion. According to the Girl Scouts’ website, “On March 12, 1912, Juliette Low gathered 18 girls to register the first troop of American Girl Guides. Margaret ‘Daisy Doots’ Gordon, her niece and namesake, was the first registered member. The name of the organization was changed to Girl Scouts the following year.” Surcharges from the sales of this coin will be paid to the Girl Scouts for program development and delivery.
Which 2013 coins are you interested in purchasing?
Which 2013 coins are you most interested in?
Any of the American Eagle Coins (30%, 11 Votes)
Native American Dollar (22%, 8 Votes)
5-Star General Commemorative (19%, 7 Votes)
Girl Scouts of the USA Centennial Silver Dollar (14%, 5 Votes)
I am not interested in any of these coins (14%, 5 Votes)
The show is centered around the Federal Reserve and primarily the operations of the Federal Reserve Bank of New York. After opening the show at Times Square, we are transported downtown to the New York Fed where they are accepting a deposit of over 1 ton of gold. Following an explanation that the New York Fed is the most trusted handler of gold in the world and has 25-percent of the world’s gold on deposit, we watch the transfer process.
As part of the transfer process, the cameras are brought into the vault and the viewers are show “walls” of gold bars. Unlike the images in the 1995 movie Die Hard: With a Vengeance, it appears that the vault that is more solid than the jail-like bars shown in the movie.
Ward visited with Federal Reserve Chairman Ben Bernanke to talk about the Fed’s roll in the markets. While in Washington Ward visits the Bureau of Engraving and Printing to show some of the process in currency printing. There was also a discussion with the United States Secret Service about anti-counterfeiting.
One of the more interesting visuals was when Ward visited the East Rutherford Operations Center (EROC), one of the New York Fed’s currency operations. Viewers were shown rows of currency and coins being stored on shelves throughout the building. And in a scene to warm my technical heart, the robotic inventory system was profiled.
According to NatGeo TV, the next time America’s Money Vault will air is on Thursday, October 18, 2012 at 4:00 PM Eastern Time. If you will be away at that time, it is worth setting the DVR (or VCR for those still going old school) to record this show.
Unrest continues in the mining communites of South Africa as the National Union of Mineworkers (NUM) ups their efforts to calm the rank and file. The NUM, an ally of the ruling African Nationa Congress (ANC), have rejected calls to exploit the termoil for the benefit of the workers.
The strike has virtually shut down the Lonmin mine that supplies 19-percent of the platinum to the world.
Gold One is reporting that the wildcat strike that caused four injuries yesterday was open on Tuesday. However, the nearby Aurora mine also owned by Gold One remains closed.
Former ANC Youth Leader Julius Malema (Courtesy of Mail & Guardian)
Worker unrest is happening during the campaign for control of the ANC. Former youth leader Julius Malema has been travelling to the effected mines blaming President Jacob Zuma for anti-worker policies and accusing the NUM of partnering with the ANC not in the benefit of the workers.
Malema was expelled from the ANC for “ill discipline.”
Lonmin and Gold Fields stock, already depressed prior to current events, are down even further on the United States and South African markets. Trading on Gold Fields stock in South Africa has been halted on market trading rules.
Currently, gold and platinum prices are trading based on current economic conditions with futures looking at December delivery of these metals. An analyst interviewed for this story said that if the unrest continues, the futures prices will not be affected until late January or early February deliveries are traded—which could begin later in September.
The Coin Collectors Blog will continue to monitor the international reporting and market reaction for their effect on metals prices. Stay tuned!
Mourners carry the casket of Andries Motlapula Ntsenyeho, one of the 34 striking platinum mineworkers shot dead at Lonmin’s Marikana mine, at his home town of Sasolburg in South Africa’s Free State province on Sept 1, 2012.
Unrest continues in the South African mining communities as the South African National Prosecuting Authority as dropped murder charges against the 270 miners arrested on Thursday for the August 16 police shootings at the Lonmin Marikana mine.
“The murder charge against the current 270 suspects, which was provisional anyway, will be formally withdrawn provisionally in court on their next court appearance,” acting national director of prosecutions Nomgcobo Jibo told a news conference.
The move to drop the charges occurred as funerals are being held for those killed during the strike.
Unrest continues in Marikana and other South African mining towns as police are being investigated after admitting to firing on striking mineworkers. Some of those officers are on administrative leave but no arrests have been made. This has put pressure on current president Jacob Zuma, who is seeking re-election this December.
The Marikana mine has been closed since the massacre and was set to re-open after this weekend’s funerals. There has been no report as to whether the wildcat sympathy strike at the KDC East mine owned by Gold Fields will allow that mine to open.
Weak demand has pushed down the market price of platinum leaving mining operators slimmer margins as costs have been rising. The price of platinum has risen only 8.3-percent ($117.00) since August 16, but only up 7.8-percent in 2012.
The U.S. Mintannounced 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.
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.
It was reported in the numismatic press but not formally announced by the ![[PDF]](http://coinsblog.ws/library/images/pdf.png)
or you can find a printable version at on the 
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