Can anybody guess what spot price for platinum will cause the Mint to suspend current Proof platinum sales? The 1oz Proof is currently selling for $2299. Thanks!
<< <i>Can anybody guess what spot price for platinum will cause the Mint to suspend current Proof platinum sales? The 1oz Proof is currently selling for $2299. Thanks! >>
Ericj96 has pointed out earlier that the mint tends to pull products when spot approaches within 5% of the mint's pricing. With the quick rise of gold and platinum last year, it provided multiple opportunities to watch the mint's behavior with respect to precious metals.
Eric
EAC member since 2011, one third of the way through my 1793 large cent type set
Received my $50 plat proofs yesterday. Each of them (badly) dinged up in the exact same spots on both the obv and rev! Back they go for replacements...
EAC member since 2011, one third of the way through my 1793 large cent type set
Received my $50 plat proofs yesterday. Each of them (badly) dinged up in the exact same spots on both the obv and rev! Back they go for replacements...
I received 10 $25s and every single one of them looked like crap. They had a ding on top of the left eyebrow and one in the right cheek (all of them). What a disappointment! Very poor quality for an item of that price! One of them had a serious case of acne. All of them had minor discoloration. Oh well, first the owl and now this...
I ordered 8 - all of them had dings on the obverse above the date, "waves" or "ripples" in the field next to the date, and a triangular pattern of 3 gouges on the reverse near the A & M of "America." Great quality for $9k worth of product.
Eric
EAC member since 2011, one third of the way through my 1793 large cent type set
Yup, those look like the same types of gouges that were amongst the lettering on my plat eagles as well. All of mine went back, I'll order several more sets over the next few days and see what arrives... Funny that there are so many problems given that I'd guess the initial production run was probably pretty small (as a result of market volatility).
Eric
EAC member since 2011, one third of the way through my 1793 large cent type set
2006-W $50 BURNISHED PLATINUM EAGLE PCGS MS-70 10th ANN PCGS 10th Anniversary LOWEST MINTAGE ONLY 2577 MINTED!
on Ebay for $1665 BIN a few minutes after it appeared for sale. You folks think that this was a good deal for long term hold or will this issue continue its decline in value over time. Curious as to your thoughts.
2006-W $50 BURNISHED PLATINUM EAGLE PCGS MS-70 10th ANN PCGS 10th Anniversary LOWEST MINTAGE ONLY 2577 MINTED!
on Ebay for $1665 BIN a few minutes after it appeared for sale. You folks think that this was a good deal for long term hold or will this issue continue its decline in value over time. Curious as to your thoughts.
on Ebay for $1665 BIN a few minutes after it appeared for sale. You folks think that this was a good deal for long term hold or will this issue continue its decline in value over time. Curious as to your thoughts.
I think you made a judicious purchase.
I received 10 $25s and every single one of them looked like crap. They had a ding on top of the left eyebrow and one in the right cheek (all of them). What a disappointment! Very poor quality for an item of that price! One of them had a serious case of acne.
I ordered (2) of the 4-coin sets. Every coin except one of the 1 ozers had noticeable dings in the fields and on the devices, and "flats" in the frost. One of the 1/2 ozers had a scratch on the rim.
Edmond - your quality sucks bad this year!!! Edmond?? You listening??
(Apparently not, but why should this year be any different?)
Added: I recall reading in Coin World that Edmond calls the Proof Plats the Mint's "Premier Product". Get that! The Premier Product!!
Q: Are You Printing Money? Bernanke: Not Literally
Bummer about all the dings. I was just working up enthusiasm to place my order.
Hey, anyone think they're going to lower the price on the '08 unc gold eagles soon? I just can't see paying that premium. Then again, that sort of thing is what makes the real rarities!
Just got my $25 '08 Plat proof. Looks great...except for the easily visible chemical, milk-spot looking blotch in the middle of Ms. Liberty's neck. aarrrrrrgh! What a pain to have to keep sending this stuff back!
Just got my 1/2-oz '08 proof and it looks nice and clean. Only problem is the capsule is too loose in the new box. Oh, and Liberty appears to be having trouble seeing. Didn't anyone ever tell her not to carry things blindfolded?
Anyway, the coin reminds me why I collect these. The proof plats are just stunning. Definitely worth the stretch. I do hope they get back to some less bureaucratic themes in the next series--if they continue it at all.
What do y'all think? Would a longer series have more collectability or should they cut it off now, and let the rest of us hang onto our houses?
"What do y'all think? Would a longer series have more collectability or should they cut it off now, and let the rest of us hang onto our houses?"
THAT IS A VERY GOOD QUESTION!
I think the answer is a long run/ short run question. In the short run ending the series will give us a finite expenditure and make the key dates more likely to survive as keys.
In the long run a lovely set of say 20-30 coins with mintages in the 4,000-10,000 range less coins that were sold to guys like kitco will make the set stronger and stronger. The larger a series is the harder it is to look past.......to a point. When you get past 50 coins that are very high denomination it tends to inhibit collector base growth. The sweet spot for high $ sets looks like 20-40 coins and if we are lucky the changing reverse proof plats will die in the low twenty range.
Guys spiking material prices (in terms of dollars which is what FDR did) is what created the strong coins in the 1900-1933 gold series. When you put together the list of common troubled infancy issues that have a tendency to create monster coins over the long run the changing reverse plats only had one problem.......high survival rates.....
When a series closes there tends to be a grab for the surviving coins. As long as there is current production there is a chance the coins you hold will not be key and those who would like to have an example can still buy one at the mint. If new coins are no longer for sale, back dates are the only option and the market has a tendency to tighten up. So the longer the series goes the more time there is for back dates to get wiped out.
My view is to pick up one of each year and ride it to the end. I look at these coins as a long term saving account. One that is not dependant on our governments fiscal behavior and make excellent family treasures.
I think you're spot on, Eric. I think 20 would cement the status of the series and help the collector base. I hope I'm around 50 years from now (unlikely!) to get an idea of the attrition that's happening now, but maybe we'll start to have a sense in 10 years. And I'm all with you about digging deep to keep up with the series as they come out. As you said, when metal is soaring, potential for rarity soars along with it. 2008 could be a great year in that regards.
What do y'all think? Would a longer series have more collectability or should they cut it off now, and let the rest of us hang onto our houses?
Is there any issue? Of course we should keep buying this stuff. I'm a salivating fool for the Mint's Proof Plats! Mortgage? Tuition? Medical Bills? Nah - give me the Plats!
So the longer the series goes the more time there is for back dates to get wiped out.
Eric, I agree with this statement wholeheartedly, especially in this situation, where the cost of entry is climbing daily.
I believe that the Plat series is beginning to die - as evidenced by a couple of things:
1) The key Anniversary Coin was produced as a 1/2 oz. coin instead of a 1 oz. coin. I know that it was done for marketing considerations in order to keep the cost down, but it also doesn't attain the status within its own series that the Silver and Gold Reverse Proofs have attained, and will continue to attain (within their own series) - simply because it's not the highest denomination in the series, which would automatically make it the "Showcase Piece".
2) Because of the relentless rise in the prices of precious metals, the number of committed collectors in the "herd" will be winnowed out - some by lack of finances, some by the temptation to cash in and some by the hesitation on the part of flippers to take such a high cost risk in such a thin market.
Interesting times, great savings account approach!
Q: Are You Printing Money? Bernanke: Not Literally
Yes, I have been a big fan of platinum but reality is starting to hit me, and I am guessing others, so that I can not just go out and plunk down 4k for a "W" unc. set of 4 and keep it. Hopefully these buds will end and maybe they will go to palladium or something....
Love that Milled British (1830-1960) Well, just Love coins, period.
<< <i>Yes, I have been a big fan of platinum but reality is starting to hit me, and I am guessing others, so that I can not just go out and plunk down 4k for a "W" unc. set of 4 and keep it. Hopefully these buds will end and maybe they will go to palladium or something.... >>
<< <i>Yes, I have been a big fan of platinum but reality is starting to hit me, and I am guessing others, so that I can not just go out and plunk down 4k for a "W" unc. set of 4 and keep it. Hopefully these buds will end and maybe they will go to palladium or something.... >>
Fractionals work. I may have to back off the larger denominations but the smaller coins are still half way reasonable.
Pieces of Eight, that is so funny, I cannot stop laughing All I have in plats, is 07' annv. set. Which seems to be doing well i PCGS 70/70 first strike.
GREAT to see your commentary back on the boards. It has been sorely missed. Congrats. on your marriage. May you have long, happy and healthy lives together.
Not doubt that you've noticed that the '06 W MS Plats have come down quite a bit. I recently picked up two $50 PCGS '06 W MS70 "Tenth Anniv." coins for $1550 each. You were very bullish on the long term potential of these in the recent past. What is your current take on these? They seem like a great long term hold to me given the very low mintage, esp. of the $50. Of course, with plat. moving ever higher who knows if they'll stay keys or not. Nonetheless, it's hard to ignore the mintage figures for this issue.
Eric, one more question: What is your take on the ASE 2008 W '08 w/'07 Rev. Highly overvalued passing craze that will come way down or 95 W like potential. Sorry if you've already weighed in on these. I didn't see it.
<< <i>THATS ABOUT WHAT MANY OF THESE PLATS LOOK LIKE AFTER THEY HAVE GONE TO.... "NEW PERMINANT HOMES"! >>
Okay, I don't get it. What mean you? >>
The plats that go to the bullion trading houses get beaten up badly in many cases. The cut up spanish coin looks good compared to the melting pot or junk bag where many of the plats are finding eternal homes. The plats will not come back in collectable grades in many cases.
Excellent points! I think there are two hard-to-predict wild cards in the mix that could make the economy much better or worse going forward:
The "better" is the accelerating pace of technological improvement, which could bring the real cost of essentials down faster than inflation drives these costs up.
The "worse" is the threat that the housing/credit crisis could potentially lead to an inflationary depression, with tax revenues falling and government expenses and deficits exploding in the near term. This could bring the social security and medicare underfunding crisis to a head much sooner than expected.
My guess is that as far as coin prices are concerned, precious metal values will play a bigger role than key date status for the foreseeable future.
Nominal incomes are increasing, while disposable incomes decrease - as Eric notes.
The tax consequences of bracket creep affect not only stock investments and earned income, but coins as well. For example, when you liquidate your extra Plats in order to buy this year's versions, you also generate a tax liability.
So - you earn more dollars (which are worth less), and are taxed more on those lower-valued dollars. You buy Plats, which appreciate - but when you sell them, you owe more tax on them because the dollar has fallen and they have jumped in price - generating a large "profit" which really isn't profit because it's all inflated dollars. But, the tax is very, very real.
The best strategy? Buy Plats (or silver), and don't churn your own account. There comes a time when chasing rarities from new low mintage issues becomes counterproductive from an investment standpoint. When the price is going up, premiums are disappearing and the tax burden from false profits will eat up any advantage you might gain from obtaining an "instant rarity."
I don't know when that point might be reached, but the government is playing a viscious game, so be careful with your money.
Q: Are You Printing Money? Bernanke: Not Literally
Love the new discourse Eric. Thank you. And JMSKI's comments give me the (unoriginal) thought that trading is a better way to build a collection of high-value coins than buying and selling. Are traded coins subject to taxes? Doesn't seem as though they would be, but I am not an expert.
So, here is a selfish, practical question: who has a steady, incoming supply of plat and gold eagles in OGP? I see slabbed stuff everywhere, but which dealers are out there getting OGP stuff and either dumping it quickly or sending it in to get slabbed? I've seen a bit of OGP on APMEX and with dealers such as Richard's Coins (R.M. Trading), but does anyone know of anyone who is getting a lot of this stuff in? Direct contact info appreciated.
Trading coins are also subject to taxation. Same as barter. While legally traded profit is taxable, realistically it can be difficult to trace on the part of the IRS. But be assured, you are legally bound to pay those taxes.
Raufus I will get to your questions among other things to the best of my ability in this section. "
Thanks very much eric. I'm looking forward to it.
What a chilling commentary on taxation. If income taxes are doubled we'll be approaching a top marginal rate of 90% in fed and state taxes with no incentive to excell.
I have been thinking about the fundamentals lately and trying to understand what I need to be doing and why. Notice that I did not say "coin fundamentals".
I enjoy coins and have been collecting them since I was 12 but I can't justify just collecting them because I like them as if they are cheap bottle caps. Strong coins are not cheap and they eat up too much of the household budget to not perform longer term. Collecting coins IS a form of savings.
Many like to forget that for the last 3,000 plus years, coins are and have been primarily a means of unitizing precious metals. This aspect of coinage struck on silver gold or platinum has been exerting itself in the last year on a scale that we have not seen in our generation and we will see it again on and off over the next twenty years.
MACROECONOMICS:
Let me run some numbers by you guys.
1. The total trade deficits of all the nations in the world with negative trade numbers combined last year not counting the US was roughly 650 billion dollars. We ran a trade deficit of 750 billion dollars last year all by ourselves. Guys we are stacking up dollars in the hands of foreign governments faster than all the other trade deficit countries in the world combined.
2. If you check the cover letter on your Social Security statement telling you what you have been paying in and what your calculated benefits will be when you retire you may notice that the SS administration by their own calculation will be running a sustained deficit by 2017 and they will need to draw on the social security trust fund deposited with the federal government from then on. Problem is, that money has already been spent and does not exit. There is no "trust fund".
3. Our total national debt is about 9 trillion dollars and its taken over two hundred years for it to build up. The present value of the total transfer payments including social security, Medicare, medicade etc. owed the baby boomers and other retirees currently stands at between 50 and 62 trillion dollars according to the General Accounting Office. These people are a huge 78,000,000 + voting block and will show up at the poles to defend their transfer checks. The real term value of these transfer payments is open for debate but whats not open for debate is that its going to hit us hard and its going to happen in the next 10 years or so. The feds are going to be looking for funding and it does not matter which party is in charge at the time. According to David Walker the head of the US GAO we will see a doubling of personal and corporate income tax or pay out only 33 cents on the dollar of promised retirement benefits. David Walker says that "anyone who thinks we can grow our way out of this situation either does not understand economic history or isn't good at math." He also says the coming generations are likely to see a significant drop in their real net income.
4. We are going to see higher real taxation rates, higher federal borrowing, and expansion of the money supply to keep the real term value of the debts from crushing us. We are going to see a drop in real term disposable income to go along with it.
What does all this have to do with coins? Part of the answer is income tax, inflation and estate tax may create a whole new breed of "coin buyers". At the same time one of the drivers that has fueled the rare coin market for the last 100 years ....growing real disposable income of the average citizen is likely to drop off.
Lets look at some numbers so we can see why this might be the case:
Lets assume the feds do not have the courage to change (increase) current tax law. Lets assume that the real inflation rate (including the unpopular items like food and fuel) stays at 6.5 percent for the next 12 years. It has been 11 percent in the last 12 months.
Our example candidate named John is 55 years old with a current net worth of $1,000,000 and a income of $80,000 per year. If he dies in 2011 his daughter would receive her full inheritance. Twelve years from now when the baby boomer bill is coming due assuming John has done no better than keep up with inflation his estate will be worth $2,130,000 and his income will be $170,000 per year. John would like to give what he has to his daughter but lets look at what percentage of his income in his last few years of his working life will make it to his child. Although John is only making 80 grand in todays dollars bracket creep will drive him into the 33 percent tax bracket intended for "wealthy" people. If John makes any kind of small windfall he ends up with just 66 cents to show for it. Then he knows that the 66 cents is going to be subject to a 55 percent estate tax for everything over 2,000,000. That 66 cents is going to be 30 cents when his daughter gets it and that assumes he pays no state income or estate taxes at all. How many of you guys want to sign up for that program? This may give John a high level of motivation to find ways to give his daughter non dollar denominated gifts that are hard to track. He does not have this motivation now but he will then.
THIS IS THE PROBLEM GOING FORWARD .......... Tax burdens are not indexed to inflation and the politicians are going to be in no position to give any relief to the tax payers. This is going to be one of the driving factors that are going to put a fire under the metals long term. The other is inflation. We just can not continue to export our currency at the rate of .75 trillion dollars a year and have the currency holdup. We just can't tax enough to pay out the 50 trillion we owe and money creation almost has to be one of the tools the Feds are going to use to prop up consumption, reduce the real value of the debts and pay its bills.
The metals may be at a short term crest and may show some weakness in the next few years but longer term the wind is at their backs.
If you read various respected commentaries on the coin market over the last 50 years the the writer will frequently note that growing disposable income is one of the key aspects of coin appreciation. Real disposable income in the US is down about 7 percent from last year and its showing up in coin prices for many series. This problem may haunt us for a while.
MODERN COIN MARKETS
THE SET VS THE KEY DATE: As has been stated before the majority of series total set values are contained in the leading three key dates. Over the last 100 years if you bought just the keys and let the rest of the coins go you would have the best appreciation rate possible especially if the keys are purchased prior to series maturity in the highest grades they could be found. This is true in good times and may be true again.
I have been asked many times why bother to collect by set? The answer is multifaceted. The first reason is condition rarity. The lowest mintage coin may not be the rarest in high grade. Second is survival rate. A common date may become a dark horse key date if they are not saved. The last and maybe the most important is demand curve diversification. If disposable income improves again or capital preservation consideration issues increase collector demand or the Mints aggressive marketing efforts build the collector base the keys are in the set and will carry the day even if the metals are flat to down. If materials spike hard and drive all the keys underwater the total set value growth will carry the day. The coins metal value is the ultimate price floor and we will do well to keep this in mind.
Lets look at the series again.
SILVER EAGLES: This series has a new member....it is the first significant die variety the 2008w with the 2007 reverse (08/07w) This coin is a modern "VAM". I have been trying to figure out what this coin is going to do after its been out for a year. Is it going to be looked at as the long term key to the series with its 47,000 or less mintage or is it going to spike and tank? I think in order to have staying power the coin has got to be regarded as absolutely necessary to have a complete silver eagle mint state set. That is determined by many things. The PCGS registry, NGC registry, Red book, Grey sheet, and silver eagle coin holder albums. The collector needs to feel that without that coin the set in not complete. The more that is true the more the collector base compression shows up in the coins price. Another thing to think about is look for coins with similar characteristics. Maybe not required for a complete date and mint mark set but wanted anyway.
The 1955 double die cent is a very obvious die variety, has a massive collector base in the Lincoln cent series and is rare. Its listed almost everywhere and is famous. Looking at the population reports about 4,000 exist with the center of the grading bell line curve in the AU58-MS61 range. They have a current market price of roughly $1500 according to the Red book. The 1955 DD cent has better ratios than the 08/07w anyway you want to cut it. Therefore I would assume that the top end of the 08w/07 is well below $1500 long term in typical MS 69 grade.
Will the 08w/017 still bring more than the 2006w silver eagle 5 years from now? Good chance but don't forget the top on coins like this shows up in the first year and will back about 30% off its first year peak in years 2-4 as is typical. Yes I know that this time is different.......
The silver eagles are selling very well and the mint has got to be very pleased. The 2007w and 2008w sold very will in the midst of market weakness and thats a good sign for the 2006-w and its date and mint mark key date status. I think the cheap coins are holding up better in this time of surging material prices and thats certainly understandable. This series is massive and a bastion of consistency in a chaotic list of product offerings. All the better date silver eagles will have prices that look like common date CC Morgans in the next 20 years.
GOLD EAGLES AND THE ULTRA HIGH RELIEF SAINT Can you hear the giant sucking sound? Remember what the one oz Buffalo did to the modern 90% pure Gold eagle saints when they came out? Sales fell about 80 percent across the board for 5 months, not just in the $50 denomination but all of them took a big hit. I have little doubt that the Ultra High relief MS gold eagle if it does come will further reduce the already poor sales for the gold eagles. Fractional buffalo gold is also in the works. How many ways can one cut the total modern US gold demand? Well our friends at the mint are setting the 2008-2009 gold eagles up for very low sales. May be the best of all years to buy will be the next few years.
Frankly I don't think the mint is all that interested in messing with 90 percent pure gold anymore and the gold eagle saints could see the chopping block soon. If they do close out the gold eagles I think it will help them. Collectors I talk to are tired of open ended series obligations and working on a closed modern series thats still affordable is attractive. If you like the gold eagle saints and think you might want to collect them then pick up the 99w and any other coming "w" mint marked frational gold. The last few key dates that are coming out of the mint are likely to enjoy astonishingly low mintages relative to the total series populations.
The Proof Ultra High Relief Saint with its 25,000 max mintage is going to be a killer if they don't have any follow on production in succeeding years. If you can afford one buy it.
FIRST SPOUSE GOLD As many expected the first spouse gold has gone through the inaugural sales spike and mintages are falling hard. This is good for the series. Coins with $500+ common dates really NEED to see key dates fall WELL under 10,000 net survivors to have any hope of doing anything longer term. I suggest that those who would like the coins let each issue fall back to a few percent over melt in the year following issue and pick them up at that time. Only if the coin is very late in its sales cycle and well short of 10,000 coins should a mint purchase be made. The only exception to this that I can think of is if you are buying the coins in bulk, cherry picking the group for a coin or two and sending the good ones to the grading service for 70s and the dogs back to the mint. $620 is too much money for a 15-20,000 mintage coin struck on $450 worth of gold.
GOLD COMMEMS The $5 gold commems were the kings of modern rarity from 1995 to 2004. Some of the better dates have been heavily promoted and the market has been cornered by a few very strong hands and the prices look like it. The series has reached a high degree of maturity in a short period of time. Jackie and his friends have plenty of company these days and holding 5,000 or 6,000 mintage coins is not quite so exclusive as it used to be especially when one considers that few of the lower mintage $5 commems have seen kitco and/or the melting pot. It would not shock me to see capital visitor center and maybe even Jakie Robinson rarity in the first spouse program in the next few years. The opportunity for the $5 commems existed when they were despised and cheap in the late 1990s trading just over melt. Those days are gone. A lack of design based unity and high prices relative to their mintage will continue to a drag on price growth going forward.
SILVER COMMEMS These coins are low mintage and cheap. I know that not having unifying design elements hurts them but very few pay them any attention right now and thats one of the keys to finding value. The 15,000-20,000 mintage 1996 Olympics coins are SO MUCH RARER than the 1995w proof silver eagle and the MS 2006w and 08w/07 but the prices don't reflect it. I have tried to understand this collector base and pricing anomaly but the best that I can come up with is that good looks and some strong unifying design element is important if not critical to long term collector base growth and key date price growth. No one coin in the silver commem series is all that much stronger than the other semi keys and that damps the keys too. In the end I think the series is under valued but how long it will take to grow in stature is anyone guess.
BUFFALO GOLD We can expect fractionals going forward. We may also see changing designs over the next few years. .999 gold is what the mint wants to work with from now on. Moy from the US Mint also likes to point out that the .999 fine gold is one of the platforms over which they have complete design freedom. If the designs start changing on a regular basis in this series it might be a good time to start picking them up. If the changing reverse platinum eagles are closed this is an area I will be looking at as my next collecting interest. We need to get through the initial sales spike on these coins and confirm that the series is going to get all the best designs because of design freedom before any of us can see this series clearly enough to have an informed opinion on them.
PLATINUM There was a time when the next generation of collector could be counted on more or less to be a series date and mint mark collector. Design stability was the stated intent of the mint and that stability tied the series members together in such a way that key dates with the highest value were the coins with the lowest mintage/surviving pops every time. The old commems taught us that series without strongly unifying (design) elements are priced as stand alone issues and the rarest ones are not necessarily more valuable than the more common popular issues. The modern fifty state quarters combined the strengths of both stable series collecting and commemorative collecting. The stable obverse and changing reverse was the ticket because it combined a much higher level of product differentiation than just a date change with unifying influence of the common obverse.
The Mint has just gone wild with an endless variety of designs and expensive issues. The market is being taught to appreciate a high degree of design variety from pocket change all the way up to platinum eagles but some overpowering way of connecting the coins together in series is still needed now more than ever.
Despite all the hardship the changing reverse platinum eagles have seen I still believe that the changing reverse platinum eagles in the out years will be the THE MODERN SUPER SET. Heres why:
1) The changing reverse platinum eagles in MS and cameo proofs represent 27 out of the 30 rarest design based type coins issued since 1915.
2) The set is struck on the ultimate US coinage metal. It is the ONLY platinum set.
3) The platinum set is not subject to the cohesion problems seen in stand alone commems. They have clear obverse design consistency that enforces series unity and changing reverse designs like the fifty state quarters enjoy.
3) The coins have been too expensive for the public to pull large volumes from the mint in any given year. Note that 1915 $50 MS Pan Pac slugs were about $2200 in todays money and considered "too expensive" so only 1 out of every 200,000 citizen bought them. Now a $50 MS changing reverse platinum eagle is $1100 and only about 1 out of every 100,000 citizens purchase one. Notice the ratios are relatively stable. Expensive issues don't sell when they are infants.
4) The mint considers the changing reverse plats their premier offering over which they have complete design and concept freedom. Consistently above average designs have been the result.
5) As has been pointed out by the classic collectors that having low mintages and good looks is important but low survival rates is equally important. New issues have the tendency to be held in bulk by dealers and speculators directly after the close of sales. These large inventories are sold off over time to "permanent homes". Coins that have been in a thousand different lock boxes deposited there 5-10 years ago don't come rushing to market at one time regardless of price. This is not true of the coins issued in the last year or so. The price spikes seen in the platinum market in late 2007 and early 2008 has made bullion buyers like Kitco & Silvertown immediately profitable places to dump large volumes of coins with high material content. This is a serious problem for platinum eagles because the strongest buyers are consumers not investors looking to hold an "alternate currency". Its simple economics. Coins of any given population and current collector base can only support prices to a certain point. Drastic material shortages that drive bullion prices above the CURRENT collector demand curve means that the coins will be sold off in junk bags if they are lucky and the melting pot if they are not.
This is precisely what is happening now. I talk to moderns collectors and dealers all over the country on a regular basis. About the only coins that have been hit as hard as the First Spouse gold on a percentage of mintage basis is the large denomination platinum 2006 & 2007 proofs, and 2006w & 2007w issues. Especially the 2007 "w" and proof $50 and $100 coins. Many back date proof platinum eagles have been sold to the "wholesalers" by dealers and collectors I know but the flow has just not been as violent. About the only coins that are not seeing hardship are the 2004 and 2005 proofs, $10 coins in general and fractional 2006w plats. Quarters by and large only get dumped for melt if they are in a 4 coin set and don't get pulled from the package for some reason.
The bottom line is this; the changing reverse plats are the rarest design base type set in the last 100 years and every time the price of the material spikes more of them get wiped out and the sets get rarer. The old saying is true "coins prices don't get strong until they are in strong hands". When coins get into well financed hands that do not wish to sell or need to sell price spikes don't bring them to market. The junk bag does the same thing. When the coins are bought and thrown in a junk bag or melted for use in converters they will not come back to market in collectible form regardless of price. The whole process is cleaning up loosely held inventory. If platinum continues to drive material content values over the clearing numismatic market price based on the then current total populations the only sets that will survive will be in closely held collections.
6) The current situation makes collecting in set form much more important. There is so much we do not know. We don't know if a so called common back date proof plat could become rarer than the mighty 2004 proofs at some point. We don't know if incomes in the US are going to be strong enough to keep collector values higher than the environmental metals catalytic value. clearly at times it will not. Never forget that the ultimate floor under any coins value is the material itself. The rarer these coins become the further left they move into the almost pure vertical portion of the demand curve and the greater the set will become. 1933 Gold is not high dollar because the government didn't make any, its because few survived.
7) Seven is a symbol of completion in the Bible and I guess this is a good place to bring up my last point. Many have wondered for years if the plats would continue at elevated prices. Despite the doubt they have and frankly the set needed to because sets need a certain number of members to become viable. Many influential people including the writer of HR 5614 are sending signals these days that 2008 will be the last year for changing reverse platinum eagles. Just like the matte proof gold of 1908-1915 they are too expensive and just not selling in volume large enough to justify the cost and material risk. If this proves to be true they more than likely will sell 2008 proofs and 2008 W plats until the inventory is gone. This translates they could be for sale until 2010 if need be. Same for the anniversary sets.
IF the 2008 plats are the last issue and stay on sale until they sell out the Mint's inventory there is a good chance the 2004 will survive as the coin with the lowest proof Red Book mintage listing. I think the $10 plats will stay very close to the original mintage relationships and this may be true to a large extent for the quarters also. The 2007 proof half is SO common I just can't see how enough of them could get wiped out to complete with the 2004. 2003 and 2005 proof platinum halves have not been abused much from what I can tell. Frankly I don't see how the 1997 and 1998 coins could compete with 2004 because almost two out of every three coins would need to be destroyed to pull into the 2004's rarity class. 1999 and 2000 proof halves bring no premium and have more than likely seen hardship if they grade 69 because the market regards an 11,000 mintage platinum eagle as common. The 2001, 2002 and 2006 are considered "common dates" and sell for melt for anything less than perfect 70s. The 01, 02 and 06 halves with their 8,000 or less initial mintages are my best guess as to the most probable dark horse key dates that could challenge the 04 one day.
The Unc "w" changing reverse mint state plats will only have three members if the platinum eagles end with the 2008 run. The problem with this is as we have covered before its the total population of the set and the relative rarity of the key that puts the heat on the key date. If we have a three year run with mintages that look like 2577, 3800, and 3000 respectively less melting for 06, 07 and 08 respectively the ratios don't model well. Three keys with no compression of the eventual collector base. Thats the BAD news.
This is the good news. The coins will more than likely represent 11 out of the 12 rarest MS type coins issued since 1915. So far 7 out of the 8 issues are rarer than Jackie Robinson MS $5 gold commems by a wide margin. Being VERY low mintage creates its own demand because an outstanding mintage in the Red Book is its own form of advertising. The coins add to the rarity fame of the platinum eagle set.
Let me ask you guys how you would like to collect. Lets say you have all the cameo proof halves from 1997 to 2008. Would you think your set is complete without the 2007 reverse proof? How about the 1997 Reverse proof? I can only speek for myself but I would like to have the following type set:
The extent to which the collector base sees this as the full type set is the extent to which the 2006 "w" and company will be considered keys. I think we will see some collectors with limited budgets just jump on the 1997-2008 cameo proof fractionals and be grateful to own such a rare set and glad to call it quits too. Others with deeper pockets will want to hold the rarest of the rare and will be more than willing to go on with the broader type set even including an example of the matt finish bullion for a grand total of an 18 coin set. What I am saying is I think those who can afford the "w" coins will pick them up and those who can't will let them ride and both groups will be happy. The unc "w" plats will preform well but just not as searing hot as they would have been with a 10 plus year run of high higher mintage issues to drive them.
Comments
1001 !! (Official first post of the second thousand.)
I see that the price of platinum is starting to take off again. Which will reach $3,000 first, platinum or oil?
My Adolph A. Weinman signature
Thanks!
Gosh, I think that name will stick!
<< <i>Can anybody guess what spot price for platinum will cause the Mint to suspend current Proof platinum sales? The 1oz Proof is currently selling for $2299.
Thanks! >>
Ericj96 has pointed out earlier that the mint tends to pull products when spot approaches within 5% of the mint's pricing. With the quick rise of gold and platinum last year, it provided multiple opportunities to watch the mint's behavior with respect to precious metals.
Eric
I received 10 $25s and every single one of them looked like crap. They had a ding on top of the left eyebrow and one in the right cheek (all of them). What a disappointment! Very poor quality for an item of that price! One of them had a serious case of acne. All of them had minor discoloration. Oh well, first the owl and now this...
Eric
Quality Control definitely an issue this year:
Eric
I just picked up:
2006-W $50 BURNISHED PLATINUM EAGLE PCGS MS-70 10th ANN
PCGS 10th Anniversary LOWEST MINTAGE ONLY 2577 MINTED!
on Ebay for $1665 BIN a few minutes after it appeared for sale. You folks think that this was a good deal for long term hold or will this issue continue its decline in value over time. Curious as to your thoughts.
Thanks!
I just picked up:
2006-W $50 BURNISHED PLATINUM EAGLE PCGS MS-70 10th ANN
PCGS 10th Anniversary LOWEST MINTAGE ONLY 2577 MINTED!
on Ebay for $1665 BIN a few minutes after it appeared for sale. You folks think that this was a good deal for long term hold or will this issue continue its decline in value over time. Curious as to your thoughts.
Thanks!
I think you made a judicious purchase.
I received 10 $25s and every single one of them looked like crap. They had a ding on top of the left eyebrow and one in the right cheek (all of them). What a disappointment! Very poor quality for an item of that price! One of them had a serious case of acne.
I ordered (2) of the 4-coin sets. Every coin except one of the 1 ozers had noticeable dings in the fields and on the devices, and "flats" in the frost. One of the 1/2 ozers had a scratch on the rim.
Edmond - your quality sucks bad this year!!! Edmond?? You listening??
(Apparently not, but why should this year be any different?)
Added: I recall reading in Coin World that Edmond calls the Proof Plats the Mint's "Premier Product". Get that! The Premier Product!!
I knew it would happen.
Hey, anyone think they're going to lower the price on the '08 unc gold eagles soon? I just can't see paying that premium. Then again, that sort of thing is what makes the real rarities!
1/10 OZ - 804
1/4 OZ - 583
1/2 OZ - 556
1 OZ - 744
(Figures above include 421 four coin sets sold)
Looks like a few 2008-W proof 70 plats are showing up on eBay.
My Adolph A. Weinman signature
Just got my 1/2-oz '08 proof and it looks nice and clean. Only problem is the capsule is too loose in the new box. Oh, and Liberty appears to be having trouble seeing. Didn't anyone ever tell her not to carry things blindfolded?
Anyway, the coin reminds me why I collect these. The proof plats are just stunning. Definitely worth the stretch. I do hope they get back to some less bureaucratic themes in the next series--if they continue it at all.
What do y'all think? Would a longer series have more collectability or should they cut it off now, and let the rest of us hang onto our houses?
THAT IS A VERY GOOD QUESTION!
I think the answer is a long run/ short run question. In the short run ending the series will give us a finite expenditure and make the key dates more likely to survive as keys.
In the long run a lovely set of say 20-30 coins with mintages in the 4,000-10,000 range less coins that were sold to guys like kitco will make the set stronger and stronger. The larger a series is the harder it is to look past.......to a point. When you get past 50 coins that are very high denomination it tends to inhibit collector base growth. The sweet spot for high $ sets looks like 20-40 coins and if we are lucky the changing reverse proof plats will die in the low twenty range.
Guys spiking material prices (in terms of dollars which is what FDR did) is what created the strong coins in the 1900-1933 gold series. When you put together the list of common troubled infancy issues that have a tendency to create monster coins over the long run the changing reverse plats only had one problem.......high survival rates.....
When a series closes there tends to be a grab for the surviving coins. As long as there is current production there is a chance the coins you hold will not be key and those who would like to have an example can still buy one at the mint. If new coins are no longer for sale, back dates are the only option and the market has a tendency to tighten up. So the longer the series goes the more time there is for back dates to get wiped out.
My view is to pick up one of each year and ride it to the end. I look at these coins as a long term saving account. One that is not dependant on our governments fiscal behavior and make excellent family treasures.
The metal or the rarity will work out for us.
Eric
I think you're spot on, Eric. I think 20 would cement the status of the series and help the collector base. I hope I'm around 50 years from now (unlikely!) to get an idea of the attrition that's happening now, but maybe we'll start to have a sense in 10 years. And I'm all with you about digging deep to keep up with the series as they come out. As you said, when metal is soaring, potential for rarity soars along with it. 2008 could be a great year in that regards.
Sneed
Is there any issue? Of course we should keep buying this stuff. I'm a salivating fool for the Mint's Proof Plats! Mortgage? Tuition? Medical Bills? Nah - give me the Plats!
So the longer the series goes the more time there is for back dates to get wiped out.
Eric, I agree with this statement wholeheartedly, especially in this situation, where the cost of entry is climbing daily.
I believe that the Plat series is beginning to die - as evidenced by a couple of things:
1) The key Anniversary Coin was produced as a 1/2 oz. coin instead of a 1 oz. coin. I know that it was done for marketing considerations in order to keep the cost down, but it also doesn't attain the status within its own series that the Silver and Gold Reverse Proofs have attained, and will continue to attain (within their own series) - simply because it's not the highest denomination in the series, which would automatically make it the "Showcase Piece".
2) Because of the relentless rise in the prices of precious metals, the number of committed collectors in the "herd" will be winnowed out - some by lack of finances, some by the temptation to cash in and some by the hesitation on the part of flippers to take such a high cost risk in such a thin market.
Interesting times, great savings account approach!
I knew it would happen.
Well, just Love coins, period.
<< <i>Yes, I have been a big fan of platinum but reality is starting to hit me, and I am guessing others, so that I can not just go out and plunk down 4k for a "W" unc. set of 4 and keep it. Hopefully these buds will end and maybe they will go to palladium or something.... >>
Can't even buy a set of 4??? What a wuss!!!
<< <i>Yes, I have been a big fan of platinum but reality is starting to hit me, and I am guessing others, so that I can not just go out and plunk down 4k for a "W" unc. set of 4 and keep it. Hopefully these buds will end and maybe they will go to palladium or something.... >>
Fractionals work. I may have to back off the larger denominations but the smaller coins are still half way reasonable.
Eric
Fractionals work. I may have to back off the larger denominations but the smaller coins are still half way reasonable.
I'd like to see the mint offer a 1/100 ounce coin with a $1 denomination and a free magnifying glass!
My Adolph A. Weinman signature
maybe they could offer a $100 coin in a "pieces of eight" style... you could purchase 1/8 of it when budget allows, eventually getting a whole coin.
I wonder what they would look like in slabs!
My Adolph A. Weinman signature
"NEW PERMINANT HOMES"!
<< <i>THATS ABOUT WHAT MANY OF THESE PLATS LOOK LIKE AFTER THEY HAVE GONE TO....
"NEW PERMINANT HOMES"! >>
Okay, I don't get it. What mean you?
GREAT to see your commentary back on the boards. It has been sorely missed. Congrats. on your marriage. May you have long, happy and healthy lives together.
Not doubt that you've noticed that the '06 W MS Plats have come down quite a bit. I recently picked up two $50 PCGS '06 W MS70 "Tenth Anniv." coins for $1550 each. You were very bullish on the long term potential of these in the recent past. What is your current take on these? They seem like a great long term hold to me given the very low mintage, esp. of the $50. Of course, with plat. moving ever higher who knows if they'll stay keys or not. Nonetheless, it's hard to ignore the mintage figures for this issue.
Thanks!
Eric, one more question: What is your take on the ASE 2008 W '08 w/'07 Rev. Highly overvalued passing craze that will come way down or 95 W like potential. Sorry if you've already weighed in on these. I didn't see it.
Thanks again.
<< <i>
<< <i>THATS ABOUT WHAT MANY OF THESE PLATS LOOK LIKE AFTER THEY HAVE GONE TO....
"NEW PERMINANT HOMES"! >>
Okay, I don't get it. What mean you? >>
The plats that go to the bullion trading houses get beaten up badly in many cases. The cut up spanish coin looks good compared to the melting pot or junk bag where many of the plats are finding eternal homes. The plats will not come back in collectable grades in many cases.
Just letting you all know that the Mint, in its infinite wisdom, changed the release date of the 2008-W UNC plats.
June/July American Eagle Platinum Uncirculated Coins
It used to be June 2.
<< <i>Just letting you all know that the Mint, in its infinite wisdom, changed the release date of the 2008-W UNC plats.
June/July American Eagle Platinum Uncirculated Coins
It used to be June 2. >>
More time to increase the issue price!
Excellent points! I think there are two hard-to-predict wild cards in the mix that could make the economy much better or worse going forward:
The "better" is the accelerating pace of technological improvement, which could bring the real cost of essentials down faster than inflation drives these costs up.
The "worse" is the threat that the housing/credit crisis could potentially lead to an inflationary depression, with tax revenues falling and government expenses and deficits exploding in the near term. This could bring the social security and medicare underfunding crisis to a head much sooner than expected.
My guess is that as far as coin prices are concerned, precious metal values will play a bigger role than key date status for the foreseeable future.
My Adolph A. Weinman signature
The tax consequences of bracket creep affect not only stock investments and earned income, but coins as well. For example, when you liquidate your extra Plats in order to buy this year's versions, you also generate a tax liability.
So - you earn more dollars (which are worth less), and are taxed more on those lower-valued dollars. You buy Plats, which appreciate - but when you sell them, you owe more tax on them because the dollar has fallen and they have jumped in price - generating a large "profit" which really isn't profit because it's all inflated dollars. But, the tax is very, very real.
The best strategy? Buy Plats (or silver), and don't churn your own account. There comes a time when chasing rarities from new low mintage issues becomes counterproductive from an investment standpoint. When the price is going up, premiums are disappearing and the tax burden from false profits will eat up any advantage you might gain from obtaining an "instant rarity."
I don't know when that point might be reached, but the government is playing a viscious game, so be careful with your money.
I knew it would happen.
So, here is a selfish, practical question: who has a steady, incoming supply of plat and gold eagles in OGP? I see slabbed stuff everywhere, but which dealers are out there getting OGP stuff and either dumping it quickly or sending it in to get slabbed? I've seen a bit of OGP on APMEX and with dealers such as Richard's Coins (R.M. Trading), but does anyone know of anyone who is getting a lot of this stuff in? Direct contact info appreciated.
Raufus I will get to your questions among other things to the best of my ability in this section. "
Thanks very much eric. I'm looking forward to it.
What a chilling commentary on taxation. If income taxes are doubled we'll be approaching a top marginal rate of 90% in fed and state taxes with no incentive to excell.
I enjoy coins and have been collecting them since I was 12 but I can't justify just collecting them because I like them as if they are cheap bottle caps. Strong coins are not cheap and they eat up too much of the household budget to not perform longer term. Collecting coins IS a form of savings.
Many like to forget that for the last 3,000 plus years, coins are and have been primarily a means of unitizing precious metals. This aspect of coinage struck on silver gold or platinum has been exerting itself in the last year on a scale that we have not seen in our generation and we will see it again on and off over the next twenty years.
MACROECONOMICS:
Let me run some numbers by you guys.
1. The total trade deficits of all the nations in the world with negative trade numbers combined last year not counting the US was roughly 650 billion dollars. We ran a trade deficit of 750 billion dollars last year all by ourselves. Guys we are stacking up dollars in the hands of foreign governments faster than all the other trade deficit countries in the world combined.
2. If you check the cover letter on your Social Security statement telling you what you have been paying in and what your calculated benefits will be when you retire you may notice that the SS administration by their own calculation will be running a sustained deficit by 2017 and they will need to draw on the social security trust fund deposited with the federal government from then on. Problem is, that money has already been spent and does not exit. There is no "trust fund".
3. Our total national debt is about 9 trillion dollars and its taken over two hundred years for it to build up. The present value of the total transfer payments including social security, Medicare, medicade etc. owed the baby boomers and other retirees currently stands at between 50 and 62 trillion dollars according to the General Accounting Office. These people are a huge 78,000,000 + voting block and will show up at the poles to defend their transfer checks. The real term value of these transfer payments is open for debate but whats not open for debate is that its going to hit us hard and its going to happen in the next 10 years or so. The feds are going to be looking for funding and it does not matter which party is in charge at the time. According to David Walker the head of the US GAO we will see a doubling of personal and corporate income tax or pay out only 33 cents on the dollar of promised retirement benefits. David Walker says that "anyone who thinks we can grow our way out of this situation either does not understand economic history or isn't good at math." He also says the coming generations are likely to see a significant drop in their real net income.
4. We are going to see higher real taxation rates, higher federal borrowing, and expansion of the money supply to keep the real term value of the debts from crushing us. We are going to see a drop in real term disposable income to go along with it.
What does all this have to do with coins? Part of the answer is income tax, inflation and estate tax may create a whole new breed of "coin buyers". At the same time one of the drivers that has fueled the rare coin market for the last 100 years ....growing real disposable income of the average citizen is likely to drop off.
Lets look at some numbers so we can see why this might be the case:
Lets assume the feds do not have the courage to change (increase) current tax law.
Lets assume that the real inflation rate (including the unpopular items like food and fuel) stays at 6.5 percent for the next 12 years. It has been 11 percent in the last 12 months.
Our example candidate named John is 55 years old with a current net worth of $1,000,000 and a income of $80,000 per year. If he dies in 2011 his daughter would receive her full inheritance. Twelve years from now when the baby boomer bill is coming due assuming John has done no better than keep up with inflation his estate will be worth $2,130,000 and his income will be $170,000 per year. John would like to give what he has to his daughter but lets look at what percentage of his income in his last few years of his working life will make it to his child. Although John is only making 80 grand in todays dollars bracket creep will drive him into the 33 percent tax bracket intended for "wealthy" people. If John makes any kind of small windfall he ends up with just 66 cents to show for it. Then he knows that the 66 cents is going to be subject to a 55 percent estate tax for everything over 2,000,000. That 66 cents is going to be 30 cents when his daughter gets it and that assumes he pays no state income or estate taxes at all. How many of you guys want to sign up for that program? This may give John a high level of motivation to find ways to give his daughter non dollar denominated gifts that are hard to track. He does not have this motivation now but he will then.
THIS IS THE PROBLEM GOING FORWARD .......... Tax burdens are not indexed to inflation and the politicians are going to be in no position to give any relief to the tax payers. This is going to be one of the driving factors that are going to put a fire under the metals long term. The other is inflation. We just can not continue to export our currency at the rate of .75 trillion dollars a year and have the currency holdup. We just can't tax enough to pay out the 50 trillion we owe and money creation almost has to be one of the tools the Feds are going to use to prop up consumption, reduce the real value of the debts and pay its bills.
The metals may be at a short term crest and may show some weakness in the next few years but longer term the wind is at their backs.
If you read various respected commentaries on the coin market over the last 50 years the the writer will frequently note that growing disposable income is one of the key aspects of coin appreciation. Real disposable income in the US is down about 7 percent from last year and its showing up in coin prices for many series. This problem may haunt us for a while.
MODERN COIN MARKETS
THE SET VS THE KEY DATE:
As has been stated before the majority of series total set values are contained in the leading three key dates. Over the last 100 years if you bought just the keys and let the rest of the coins go you would have the best appreciation rate possible especially if the keys are purchased prior to series maturity in the highest grades they could be found. This is true in good times and may be true again.
I have been asked many times why bother to collect by set? The answer is multifaceted. The first reason is condition rarity. The lowest mintage coin may not be the rarest in high grade. Second is survival rate. A common date may become a dark horse key date if they are not saved. The last and maybe the most important is demand curve diversification. If disposable income improves again or capital preservation consideration issues increase collector demand or the Mints aggressive marketing efforts build the collector base the keys are in the set and will carry the day even if the metals are flat to down. If materials spike hard and drive all the keys underwater the total set value growth will carry the day. The coins metal value is the ultimate price floor and we will do well to keep this in mind.
Lets look at the series again.
SILVER EAGLES:
This series has a new member....it is the first significant die variety the 2008w with the 2007 reverse (08/07w) This coin is a modern "VAM". I have been trying to figure out what this coin is going to do after its been out for a year. Is it going to be looked at as the long term key to the series with its 47,000 or less mintage or is it going to spike and tank? I think in order to have staying power the coin has got to be regarded as absolutely necessary to have a complete silver eagle mint state set. That is determined by many things. The PCGS registry, NGC registry, Red book, Grey sheet, and silver eagle coin holder albums. The collector needs to feel that without that coin the set in not complete. The more that is true the more the collector base compression shows up in the coins price. Another thing to think about is look for coins with similar characteristics. Maybe not required for a complete date and mint mark set but wanted anyway.
The 1955 double die cent is a very obvious die variety, has a massive collector base in the Lincoln cent series and is rare. Its listed almost everywhere and is famous. Looking at the population reports about 4,000 exist with the center of the grading bell line curve in the AU58-MS61 range. They have a current market price of roughly $1500 according to the Red book. The 1955 DD cent has better ratios than the 08/07w anyway you want to cut it. Therefore I would assume that the top end of the 08w/07 is well below $1500 long term in typical MS 69 grade.
Will the 08w/017 still bring more than the 2006w silver eagle 5 years from now? Good chance but don't forget the top on coins like this shows up in the first year and will back about 30% off its first year peak in years 2-4 as is typical. Yes I know that this time is different.......
The silver eagles are selling very well and the mint has got to be very pleased. The 2007w and 2008w sold very will in the midst of market weakness and thats a good sign for the 2006-w and its date and mint mark key date status. I think the cheap coins are holding up better in this time of surging material prices and thats certainly understandable. This series is massive and a bastion of consistency in a chaotic list of product offerings. All the better date silver eagles will have prices that look like common date CC Morgans in the next 20 years.
GOLD EAGLES AND THE ULTRA HIGH RELIEF SAINT
Can you hear the giant sucking sound? Remember what the one oz Buffalo did to the modern 90% pure Gold eagle saints when they came out? Sales fell about 80 percent across the board for 5 months, not just in the $50 denomination but all of them took a big hit. I have little doubt that the Ultra High relief MS gold eagle if it does come will further reduce the already poor sales for the gold eagles. Fractional buffalo gold is also in the works. How many ways can one cut the total modern US gold demand? Well our friends at the mint are setting the 2008-2009 gold eagles up for very low sales. May be the best of all years to buy will be the next few years.
Frankly I don't think the mint is all that interested in messing with 90 percent pure gold anymore and the gold eagle saints could see the chopping block soon. If they do close out the gold eagles I think it will help them. Collectors I talk to are tired of open ended series obligations and working on a closed modern series thats still affordable is attractive. If you like the gold eagle saints and think you might want to collect them then pick up the 99w and any other coming "w" mint marked frational gold. The last few key dates that are coming out of the mint are likely to enjoy astonishingly low mintages relative to the total series populations.
The Proof Ultra High Relief Saint with its 25,000 max mintage is going to be a killer if they don't have any follow on production in succeeding years. If you can afford one buy it.
FIRST SPOUSE GOLD
As many expected the first spouse gold has gone through the inaugural sales spike and mintages are falling hard. This is good for the series. Coins with $500+ common dates really NEED to see key dates fall WELL under 10,000 net survivors to have any hope of doing anything longer term. I suggest that those who would like the coins let each issue fall back to a few percent over melt in the year following issue and pick them up at that time. Only if the coin is very late in its sales cycle and well short of 10,000 coins should a mint purchase be made. The only exception to this that I can think of is if you are buying the coins in bulk, cherry picking the group for a coin or two and sending the good ones to the grading service for 70s and the dogs back to the mint. $620 is too much money for a 15-20,000 mintage coin struck on $450 worth of gold.
GOLD COMMEMS
The $5 gold commems were the kings of modern rarity from 1995 to 2004. Some of the better dates have been heavily promoted and the market has been cornered by a few very strong hands and the prices look like it. The series has reached a high degree of maturity in a short period of time. Jackie and his friends have plenty of company these days and holding 5,000 or 6,000 mintage coins is not quite so exclusive as it used to be especially when one considers that few of the lower mintage $5 commems have seen kitco and/or the melting pot. It would not shock me to see capital visitor center and maybe even Jakie Robinson rarity in the first spouse program in the next few years. The opportunity for the $5 commems existed when they were despised and cheap in the late 1990s trading just over melt. Those days are gone. A lack of design based unity and high prices relative to their mintage will continue to a drag on price growth going forward.
SILVER COMMEMS
These coins are low mintage and cheap. I know that not having unifying design elements hurts them but very few pay them any attention right now and thats one of the keys to finding value. The 15,000-20,000 mintage 1996 Olympics coins are SO MUCH RARER than the 1995w proof silver eagle and the MS 2006w and 08w/07 but the prices don't reflect it. I have tried to understand this collector base and pricing anomaly but the best that I can come up with is that good looks and some strong unifying design element is important if not critical to long term collector base growth and key date price growth. No one coin in the silver commem series is all that much stronger than the other semi keys and that damps the keys too. In the end I think the series is under valued but how long it will take to grow in stature is anyone guess.
BUFFALO GOLD
We can expect fractionals going forward. We may also see changing designs over the next few years. .999 gold is what the mint wants to work with from now on. Moy from the US Mint also likes to point out that the .999 fine gold is one of the platforms over which they have complete design freedom. If the designs start changing on a regular basis in this series it might be a good time to start picking them up. If the changing reverse platinum eagles are closed this is an area I will be looking at as my next collecting interest. We need to get through the initial sales spike on these coins and confirm that the series is going to get all the best designs because of design freedom before any of us can see this series clearly enough to have an informed opinion on them.
PLATINUM
There was a time when the next generation of collector could be counted on more or less to be a series date and mint mark collector. Design stability was the stated intent of the mint and that stability tied the series members together in such a way that key dates with the highest value were the coins with the lowest mintage/surviving pops every time. The old commems taught us that series without strongly unifying (design) elements are priced as stand alone issues and the rarest ones are not necessarily more valuable than the more common popular issues. The modern fifty state quarters combined the strengths of both stable series collecting and commemorative collecting. The stable obverse and changing reverse was the ticket because it combined a much higher level of product differentiation than just a date change with unifying influence of the common obverse.
The Mint has just gone wild with an endless variety of designs and expensive issues. The market is being taught to appreciate a high degree of design variety from pocket change all the way up to platinum eagles but some overpowering way of connecting the coins together in series is still needed now more than ever.
Despite all the hardship the changing reverse platinum eagles have seen I still believe that the changing reverse platinum eagles in the out years will be the THE MODERN SUPER SET. Heres why:
1) The changing reverse platinum eagles in MS and cameo proofs represent 27 out of the 30 rarest design based type coins issued since 1915.
2) The set is struck on the ultimate US coinage metal. It is the ONLY platinum set.
3) The platinum set is not subject to the cohesion problems seen in stand alone commems. They have clear obverse design consistency that enforces series unity and changing reverse designs like the fifty state quarters enjoy.
3) The coins have been too expensive for the public to pull large volumes from the mint in any given year. Note that 1915 $50 MS Pan Pac slugs were about $2200 in todays money and considered "too expensive" so only 1 out of every 200,000 citizen bought them. Now a $50 MS changing reverse platinum eagle is $1100 and only about 1 out of every 100,000 citizens purchase one. Notice the ratios are relatively stable. Expensive issues don't sell when they are infants.
4) The mint considers the changing reverse plats their premier offering over which they have complete design and concept freedom. Consistently above average designs have been the result.
5) As has been pointed out by the classic collectors that having low mintages and good looks is important but low survival rates is equally important. New issues have the tendency to be held in bulk by dealers and speculators directly after the close of sales. These large inventories are sold off over time to "permanent homes". Coins that have been in a thousand different lock boxes deposited there 5-10 years ago don't come rushing to market at one time regardless of price. This is not true of the coins issued in the last year or so. The price spikes seen in the platinum market in late 2007 and early 2008 has made bullion buyers like Kitco & Silvertown immediately profitable places to dump large volumes of coins with high material content. This is a serious problem for platinum eagles because the strongest buyers are consumers not investors looking to hold an "alternate currency". Its simple economics. Coins of any given population and current collector base can only support prices to a certain point. Drastic material shortages that drive bullion prices above the CURRENT collector demand curve means that the coins will be sold off in junk bags if they are lucky and the melting pot if they are not.
This is precisely what is happening now. I talk to moderns collectors and dealers all over the country on a regular basis. About the only coins that have been hit as hard as the First Spouse gold on a percentage of mintage basis is the large denomination platinum 2006 & 2007 proofs, and 2006w & 2007w issues. Especially the 2007 "w" and proof $50 and $100 coins. Many back date proof platinum eagles have been sold to the "wholesalers" by dealers and collectors I know but the flow has just not been as violent. About the only coins that are not seeing hardship are the 2004 and 2005 proofs, $10 coins in general and fractional 2006w plats. Quarters by and large only get dumped for melt if they are in a 4 coin set and don't get pulled from the package for some reason.
The bottom line is this; the changing reverse plats are the rarest design base type set in the last 100 years and every time the price of the material spikes more of them get wiped out and the sets get rarer. The old saying is true "coins prices don't get strong until they are in strong hands". When coins get into well financed hands that do not wish to sell or need to sell price spikes don't bring them to market. The junk bag does the same thing. When the coins are bought and thrown in a junk bag or melted for use in converters they will not come back to market in collectible form regardless of price. The whole process is cleaning up loosely held inventory. If platinum continues to drive material content values over the clearing numismatic market price based on the then current total populations the only sets that will survive will be in closely held collections.
6) The current situation makes collecting in set form much more important. There is so much we do not know. We don't know if a so called common back date proof plat could become rarer than the mighty 2004 proofs at some point. We don't know if incomes in the US are going to be strong enough to keep collector values higher than the environmental metals catalytic value. clearly at times it will not. Never forget that the ultimate floor under any coins value is the material itself. The rarer these coins become the further left they move into the almost pure vertical portion of the demand curve and the greater the set will become. 1933 Gold is not high dollar because the government didn't make any, its because few survived.
7) Seven is a symbol of completion in the Bible and I guess this is a good place to bring up my last point. Many have wondered for years if the plats would continue at elevated prices. Despite the doubt they have and frankly the set needed to because sets need a certain number of members to become viable. Many influential people including the writer of HR 5614 are sending signals these days that 2008 will be the last year for changing reverse platinum eagles. Just like the matte proof gold of 1908-1915 they are too expensive and just not selling in volume large enough to justify the cost and material risk. If this proves to be true they more than likely will sell 2008 proofs and 2008 W plats until the inventory is gone. This translates they could be for sale until 2010 if need be. Same for the anniversary sets.
IF the 2008 plats are the last issue and stay on sale until they sell out the Mint's inventory there is a good chance the 2004 will survive as the coin with the lowest proof Red Book mintage listing. I think the $10 plats will stay very close to the original mintage relationships and this may be true to a large extent for the quarters also. The 2007 proof half is SO common I just can't see how enough of them could get wiped out to complete with the 2004. 2003 and 2005 proof platinum halves have not been abused much from what I can tell. Frankly I don't see how the 1997 and 1998 coins could compete with 2004 because almost two out of every three coins would need to be destroyed to pull into the 2004's rarity class. 1999 and 2000 proof halves bring no premium and have more than likely seen hardship if they grade 69 because the market regards an 11,000 mintage platinum eagle as common. The 2001, 2002 and 2006 are considered "common dates" and sell for melt for anything less than perfect 70s. The 01, 02 and 06 halves with their 8,000 or less initial mintages are my best guess as to the most probable dark horse key dates that could challenge the 04 one day.
The Unc "w" changing reverse mint state plats will only have three members if the platinum eagles end with the 2008 run. The problem with this is as we have covered before its the total population of the set and the relative rarity of the key that puts the heat on the key date. If we have a three year run with mintages that look like 2577, 3800, and 3000 respectively less melting for 06, 07 and 08 respectively the ratios don't model well. Three keys with no compression of the eventual collector base. Thats the BAD news.
This is the good news. The coins will more than likely represent 11 out of the 12 rarest MS type coins issued since 1915. So far 7 out of the 8 issues are rarer than Jackie Robinson MS $5 gold commems by a wide margin. Being VERY low mintage creates its own demand because an outstanding mintage in the Red Book is its own form of advertising. The coins add to the rarity fame of the platinum eagle set.
Let me ask you guys how you would like to collect. Lets say you have all the cameo proof halves from 1997 to 2008. Would you think your set is complete without the 2007 reverse proof? How about the 1997 Reverse proof? I can only speek for myself but I would like to have the following type set:
1997 Cameo/1997 Reverse Proof Bullion
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007 Cameo/ 2007 Reverse Proof Ann.
2008
2006 "w"
2007 "w"
2008 "w"
The extent to which the collector base sees this as the full type set is the extent to which the 2006 "w" and company will be considered keys.
I think we will see some collectors with limited budgets just jump on the 1997-2008 cameo proof fractionals and be grateful to own such a rare set and glad to call it quits too. Others with deeper pockets will want to hold the rarest of the rare and will be more than willing to go on with the broader type set even including an example of the matt finish bullion for a grand total of an 18 coin set. What I am saying is I think those who can afford the "w" coins will pick them up and those who can't will let them ride and both groups will be happy. The unc "w" plats will preform well but just not as searing hot as they would have been with a 10 plus year run of high higher mintage issues to drive them.
THE PRICE OF PLATINUM AND DIESEL ENGINES: