PCGS, NGC Coin Grading Scam Alert (on CMI gold and silver site)

fc · June 10, 2007 12:23PM

would anyone care to read this and comment on it?

link to http://www.cmi-gold-silver.com/PCGS-NGC-coins-grading-services.html

Now, though, the grading services are part and parcel to the promotion of bullion coins, which has become a problem not so much for coin collectors but new investors who, wanting only to invest in gold coins, sadly fall victims to telemarketer stories. PCGS and NGC helped stamp out one unscrupulous practice but are implicit in another.

Because slabbed coins are so widely received, the slabbing of modern coins lends validity to them that they do not deserve, and that is a shame. The services are tremendous assets to coin collecting. They should have never started grading modern bullion coins.

RedTiger · June 10, 2007 12:41PM

I glanced at it. Sounds like self-serving self-promotion. I might be off base, however, if it quacks like a duck, it is probably a duck.

Personally, I wouldn't do business with that firm, on the basis of their harshly worded article. If someone asked if they should do business with that firm, I would vote no. The article does little to educate the average collector and does a lot that will scare them. Thumbs down on the article, thumbs down on the firm. Others are welcome to other opinions.

RedTiger · June 10, 2007 12:46PM

Let me add what I always write to new collectors. Collect what you like, not what someone else likes. Learn how to grade, if grade is in anyway involved in the price of what you are buying. Learn the going wholesale and retail prices for the coins you are interested in. Cultivate contacts so as to get better prices when buying and selling. This applies to moderns, classics, high grade, low grade, foreign coins, whatever. If a person does all of that I don't care if they buy colorized enameled gold proof eagles, as long as they have an understanding of what they are buying, what price they are likely to get when selling to a dealer or another collector, and they enjoy the hobby.

Joflax · June 10, 2007 1:23PM

Yeah lets blame the TPGs not the telemarketers.
The demand for graded bullion coins drives the market , not the telemarketers.

Zoins · June 10, 2007 1:29PM

Most people buying ultra-modern NCLT probably know there are a gazillion 69s and would-be-69s out there.

Of course, TPGs net-grade some problem classic coins, giving those coins additional legitimacy that may or may not be warranted.

As for their argument that AGEs and ASEs shouldn't be slabbed because they didn't circulate, there are large numbers of Morgans and Saints never circulated leading to may MS "widget" specimens. Should those coins also be unworthy of the TPGs?

Joflax · June 10, 2007 1:37PM

It also protects the buyer from those counterfeit eagles that showed up a few years ago , as well as authenticating the high value (metal value) of 1 oz gold and platinum coins

cullenbryant · June 10, 2007 1:38PM

some people use the tpg's as an added layer of authenticity for uncirculated bullion.
but as the Chinese and others are faking the slabs and copyrights,
that aspect too may come into question.

FatMan · June 10, 2007 1:39PM

I find very little to disagree with in the article. I do believe it was written as an educational piece that all bullion collectors should read. I am sure CMI gets hundreds of people a day calling wanting to sell their slabbed bullion at prices a bullion company can only laugh at. No different than the dealer that has to inform the SATH customer that their slabbed silver eagles or Morgan Dollars are worth only 30 to 40 cents on the dollar to what they paid.

TwoSides2aCoin · June 10, 2007 1:41PM

I read the article, but I am not so impressed by it. It seems to give an "attaboy" to the TPGs for creating a "trustworthy market" and in the same breath it fosters doubt and plants seeds of disdain for a company that left their roots to adapt to a changing market and a company that has to change with the market to keep up in it. I found that the author sort of throws a jab , left hook, uppercut and right cross at the TPGs for doing what collectors and dealers ask of them.

In addition, I agree with the OP. How did we ever consider BULLION COINS in the mix ?
Who collects them by "GRADE or for a registry set" ? But then again... we are all collectors of sorts. Live and let live.

BlindedByEgo · June 10, 2007 1:47PM

<< I find very little to disagree with in the article. I do believe it was written as an educational piece that all bullion collectors should read... >>

I agree with much of what is in the article, but it paints with a broad brush. Certainly one cannot argue that a 2006 RP or a 1995 W SAE carry no premium over bullion value. Modern bullion is highly collectable in its' own right and cannot, with or without TPGs, be represented otherwise.

Edited for punctuation

Joflax · June 10, 2007 1:48PM

<< I read the article, but I am not so impressed by it. It seems to give an "attaboy" to the TPGs for creating a "trustworthy market" and in the same breath it fosters doubt and plants seeds of disdain for a company that left their roots to adapt to a changing market and a company that has to change with the market to keep up in it. I found that the author sort of throws a jab , left hook, uppercut and right cross at the TPGs for doing what collectors and dealers ask of them.

In addition, I agree with the OP. How did we ever consider BULLION COINS in the mix ?
Who collects them by "GRADE or for a registry set" ? But then again... we are all collectors of sorts. Live and let live. >>

There are a bunch of folks that collect them for registry sets , have a look at pcgs registry site. The only coins with more registry sets than the bullion coins are Dollars, proof sets ,and mint sets .
There is a HUGE collector base for these issues

fc · June 10, 2007 1:53PM

great discussion going here. i have such mixed feelings.
i basically agree with the article and with fatman's sentiment...
but then joflax comes out with some very good points.

so i think, gee, could i live without pcgs/ngc when it comes to buying
half eagles (the way i do, online) and the conclusion is sadly no.

but could i do without a tpg when buying bullion... especially the
handful of dates that are NOT collectable above and beyond the norm,
and the answer is yes.. i could live without the TPGs.

every coin is bright uncirculated example. if i wanted plat i would
go a trust worthy bullion dealer or the mint themselves.

Joflax · June 10, 2007 2:00PM

The problem comes up when selling bullion, bars need to be assayed for authenticity , and the idea of the eagles was that they are internationally recognized and were easily tradeable,
Now suddenly the chinese can make em out of lead and we need some other way to authenticate them and the tpgs do a great job

cullenbryant · June 10, 2007 2:02PM

agree totally. it's the selling that's the problem. not finding reputable places to buy.

RedTiger · June 10, 2007 2:02PM

<< I find very little to disagree with in the article. I do believe it was written as an educational piece that all bullion collectors should read. I am sure CMI gets hundreds of people a day calling wanting to sell their slabbed bullion at prices a bullion company can only laugh at. No different than the dealer that has to inform the SATH customer that their slabbed silver eagles or Morgan Dollars are worth only 30 to 40 cents on the dollar to what they paid. >>

Good idea to mention Morgans. More has been lost on overpriced, overhyped Morgans than all the moderns ever minted, times 100. Should CMI indict the grading companies for slabbing Morgans because telemarketers sometimes sell slabbed ones for ridiculously high prices? In my opinion, that is why the article is close to useless. Most of the scams have little to do with moderns or slabs, and everything to do with telemarketers and their prey. A fool will still be a fool. If a foolish person is willing to pay a ridiculously high price, it doesn't matter what kind of holder it is in, or what kind of coin it is.

The telemarketers might be selling a "100 year old silver dollar" raw for $75 per coin or a no-name slabbed PF70 for PCGS guide prices, it doesn't make much difference if the buyer is willing to buy the load of baloney.

I do find it discouraging that I can't find any prices on the CMI site in a few minutes of looking. I would be happier if they indicated prices like many other bullion dealers do, at least quote something like spot +$20, or spot +3% or whatever.

/edit typos

notwilight · June 10, 2007 2:07PM

CMI is welcome to their opinion, and this guy clearly has one. But to write it up in the documentary tone he has makes it clear he is trying to sway the newbies into avoiding that slabbed stuff and just buying beat up bullion coins from him. He's doing just what he accuses the scammers of doin. This article condemns his entire site in my mind. --Jerry

FatMan · June 10, 2007 2:11PM

Remember that CMI is writing to investors, not collectors. I have no problem with collectors collecting what they like. Heck, I have a complete set of PCGS Silver Eagles because I happen to like the design and the low cost makes for a fun set. But there are hundreds of thousands of these slabbed bullion coins in the hands of non collectors that believe the slab adds value, and for the most part they do not. There are more people getting hurt with these slabs than there are real collectors who are getting enjoyment. That does not make the TPGs bad companies. They are acting with a profit motive and reacting to this market demand. But the article in question is spot on when one realizes who the audience is.

BlindedByEgo · June 10, 2007 2:17PM

<< Remember that CMI is writing to investors, not collectors. I have no problem with collectors collecting what they like. Heck, I have a complete set of PCGS Silver Eagles because I happen to like the design and the low cost makes for a fun set. But there are hundreds of thousands of these slabbed bullion coins in the hands of non collectors that believe the slab adds value, and for the most part they do not. There are more people getting hurt with these slabs than there are real collectors who are getting enjoyment. That does not make the TPGs bad companies. They are acting with a profit motive and reacting to this market demand. But the article in question is spot on when one realizes who the audience is. >>

Great points here. Seems like the only solution would be for the TPG to creat a collectors slab and a different slab for the investor.

It is natural in a free market to want to maximize returns. In an unregulated market, this leave the door open for the telemarketers to shade the truth. It's been done for years, and will probably continue... Both within the law and outside of it. Regardless, as Jerry states so eloquently, the article is pretty much self-serving. It's just a different flavor of Kool-Aide.

BlackBeard · June 10, 2007 2:17PM

Ok, fresh from the conspiracy desk. Does the "milk spot" issue and the fact that no unc ASE's have graded 70 lately seem intentional as a way to prevent bullion coins from becoming high priced collectibles? Seems odd that the Commemoratives aren't stuck with this problem, yet the ASE's can't be cured.

This is not necessarily my opinion, just a thought that popped up.

RedTiger · June 10, 2007 2:24PM

<< Remember that CMI is writing to investors, not collectors. I have no problem with collectors collecting what they like. Heck, I have a complete set of PCGS Silver Eagles because I happen to like the design and the low cost makes for a fun set. But there are hundreds of thousands of these slabbed bullion coins in the hands of non collectors that believe the slab adds value, and for the most part they do not. There are more people getting hurt with these slabs than there are real collectors who are getting enjoyment. That does not make the TPGs bad companies. They are acting with a profit motive and reacting to this market demand. But the article in question is spot on when one realizes who the audience is. >>

You are welcome to your opinion. I disagree. Very few slabs are going to the investor market, except the ones being sold by telemarketers. The article pokes fun at Ebay, saying it is not the real world. The Ebay world is a lot more real than the world of the typical coin investor. Like I said in my first response, the article does a lot to scare folks, and little to educate. The typical coin investor is often on the lowest rung of the numismatic food chain. The average collector usually knows ten times as much about coins, about grading and pricing than the typical investor. I would go so far as to say that the typical Ebay purchaser of a modern bullion coin in a PCGS or NGC slab, probably knows a lot more about coins, about pricing and grading, than the average CMI client.

I don't know anything about CMI except what I have read via the link, and a few minutes exploring their website. Again, on the basis of the harshly worded article (and the fact that they don't post easy to find prices on their site), I would not do business with them. If someone asked me what I thought about the firm, again, I would give them the thumbs down and advise the person to keep shopping. Again, if it quacks like a duck, it is likely to be a duck.

/edit typos again

Joflax · June 10, 2007 2:35PM

There are 2292 registry sets in bullion coins on PCGS alone, compared to 604 sets in gold which includes $1 $2.5 $5 $10 $20 classic sets. These are not bullion investors

TwoSides2aCoin · June 10, 2007 2:45PM

Some final observations on the grading services
.....Now, though, the grading services are part and parcel to the promotion of bullion coins, which has become a problem not so much for coin collectors but new investors who, wanting only to invest in gold coins, sadly fall victims to telemarketer stories. PCGS and NGC helped stamp out one unscrupulous practice but are implicit in another.

Because slabbed coins are so widely received, the slabbing of modern coins lends validity to them that they do not deserve, and that is a shame. The services are tremendous assets to coin collecting. They should have never started grading modern bullion coins.

To say that NGC and PCGS are implicit is to say they are manipulating this market. I contend it's the dealers and telemarketers doing all the manipulating here. Some people are mad cuz the price guide doesn't reflect actual market prices. I say HOGWASH... Of course, I still wonder why people are playing the registry game with bullion, but to each their own.

fishcooker · June 10, 2007 2:50PM

Sad that electrons died making that article.

FatMan · June 10, 2007 3:04PM

<< There are 2292 registry sets in bullion coins on PCGS alone, compared to 604 sets in gold which includes $1 $2.5 $5 $10 $20 classic sets. These are not bullion investors >>

And I am one of them. But lets get real here. This slabbing of bullion has become huge business. And when it comes to bullion investing, a slab holds minimal value if any. NGC and PCGS have slabbed 2213253 silver eagles to date. That represents about 1000 per registry set. Massive quantities of these slabs are ending up in uninformed investor hands who are paying for added value that simply does not exist in the bullion market. You will also find a good article on the CMI website about the "First Strike" slabs.

Joflax · June 10, 2007 4:20PM

They have also slabbed only 204, 1995 $10 ms gold eagles, and 482 1987 $25 eagles and only 1100 of the key date 1991 $25 eagle, Over 650 000 saints have been graded at PCGS alone, whereas 250 000 gold eagles (all denominations) have been graded.
Try putting together a set of gold eagles in ms69....its not as easy as you think. There are only 171 ms69 95 $10 and 360 1990 $25s and you will very rarely see them available.
I happen to agree about the first strike designation , but that is all that we can hang on the TPGs at the moment , its a stupid gimmick....I guess this thread will go poof now

PCGS, NGC Coin Grading Scam Alert (on CMI gold and silver site)

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