From CoinNews.net:

Released at Noon Eastern on Thursday, December 3, 2009, the Platinum Eagles were limited to a mintage of only 8,000. Over 7,200 of those sold in the first few days, even with a household order limit of 5 pieces in place. The US Mint sold just 4,769 of the one ounce proof coins during all of last year.

Some had theorized that this year’s run would be challenged by the high price of the coin ($1792.00) and the relatively unpopular new design.  However, given the huge demand for precious metals this year for investment (gold, silver, platinum, palladium), it’s hard to be completely surprised that this coin sold out so quickly.

Nope.  2008 the US Mint only sold 4,769 coins.  This year, they sell out early at 8000 coins.

The case for buying platinum right now is fairly strong:

• The relative price of platinum to gold is extremely low, given gold’s huge run up.  A few years ago, platinum cost over 3x an equivalent amount of gold.  At current prices, the two metals are approaching parity.
• Simple investment vehicles in Platinum and Palladium, like ETFs, do exist (they trade in London), but don’t have popular US versions (yet), so investment demand remains weak compared to it’s ETF-rich brethren of gold (GLD) and silver (SLV).
• The automotive industry, which is the largest consumer of platinum and palladium, is extremely depressed.  However, since the demand for fuel efficient cars is growing, the use of these metals in catalytic converters and fuel cells seems to forecast significant future demand when the industry recovers.

That being said, I was surprised when I searched eBay for completed listings for the 2009 Platinum Eagle.  Normally, when there is a sell out at the US Mint, you immediately see panic buying on eBay for huge premiums over the US Mint price.

Here is the query.  What you see is that, as of December 12, the prices range from $1727 to $2050, hardly a premium given the transaction costs of eBay / PayPal which can easily run 8-9%.

As a result, I have to wonder:

• Was the sell out the product of true individual demand for the coin?  Or was this a case of coin dealers speculating on a sell out and premium collectible opportunity?

The problem with the Platinum Eagle series is that it’s unclear how many collectors actually try to build “the complete set” of these expensive coins.  Set building is typically the primary driver for premium values for the silver and gold eagle series.

I’ll be watching the completed auctions closely this coming week.  There are a couple sellers already experimenting with higher prices.  Let’s see if they stick.

An article last week in the Wall Street Journal on investing in gold reminded me of a topic I had meant to cover this past summer:

What is the best hedge for a crisis?

The last two years have validated the fundamental premise of The Black Swan theory.  That premise is that, due to incomplete information and faulty statistical assumptions, the market generally underprices risk at the “tails” of the distribution.

In other words, while the outcomes of the market tend to look like a normal distribution, in reality, more “rare” events happen than would be predicted mathematically.

Given a potential fear of crisis, what is the best way to hedge?  What’s the best way to have some fundamental security in the face of these events?

For Nassim Taleb, the author, he has made his investment approach well known.  He keeps the vast majority of his money in cash, and periodically invests a small percentage in out-of-the-money puts on the market. In 2008, this made for extremely high returns (between 65% and 115%).

Unfortunately, this is such an extreme approach, it’s hard to recommend it as a general practice for anyone but the most stalwart intellectual and contrarian.

If you read any financial press, or listen to AM radio, you likely have heard a much more common refrain about a hedge against crists:  Gold.

Gold has historically been pitched as the ultimate hedge against inflation and crisis.  You can literally find websites that explain how to not only buy gold bullion, but how to effectively bury it in your yard in such a way that it won’t come up on satellite photos (in case the US Government chooses to confiscate it again, like FDR did in 1933.)  I’m not kidding.

Because fascination with gold goes back basically as long as recorded history, it’s rare to find new information on the topic.

This article in Seeking Alpha, however, caught my eye, as a rare piece that had something new to say about investing in Gold.

July 9: A Golden Hedge Against The Dreaded Dollar

This article highlights a well known point – that recently, when the market collapsed, gold actually collapsed with it.  In fact, if you look at the charts, in the past decade, gold and the market look like their moving together.  This makes it a terrible hedge, because good hedges are supposed to be decoupled.

In truth, GLD does appear to be a venerable contender for a portion of a well-diversified portfolio. Yet in a “black swan/perfect storm catastrophe” like the 3 month, systemic breakdown of 2008 (September through November), GLD dropped an astonishing -30%.  PowerShares DB U.S. Dollar Bullish (UUP) soared 20%.

What’s interesting, however, is that in these periods, a very surprising asset has done well: The US Dollar.  The author goes on to advocate for a split between the US Dollar Bullish ETF and Gold.

The article shows this chart, which tracks gold and the US dollar over the past two years:

The insight here is not that you should split your “crisis” holdings between Gold and the Dollar.  Most Americans are already heavily weighted in dollar holdings.   The insight is simply that gold actually doesn’t cover you in all crises, despite the protestations of the gold bugs.

Indeed, I would like to see this relationship going back over the past century, to see what possible approaches might make sense:

• A balanced approach?
• A reciprocal trade where you sell into strength of one, and buy the other?
• Relationships between various mixes of gold & dollar to hedge a stock portfolio?

My guess is that a dollar-denominated fixed income allocation (Treasuries) would look similar to dollar bullish, and would fit a more traditional view of asset allocation.

It seems that in early April, Max Baucus (Sentator from Montana) put forward a bill (S. 758) to authorize the US Mint to produce a 1 ounce Palladium coin, similar to the very successful 2009 Ultra High Relief gold coin.

CoinNews.net: Palladium Ultra High Relief Coins Come Back, S. 758

History, however, provides insights. Senators Max Baucus [D-MT] and Jon Tester [D-MT] sponsored S. 758 and they also introduced S. 2924 for the same purpose last year. That bill was similar to an earlier and unanimously passed House version, H.R. 5614. The Senate failed to take action on either before the new year, and both died with the end of the 110th congress.

The previous bills would have authorized one-ounce proof and uncirculated palladium coins that were digital reproductions of the famed Augustus Saint-Gaudens’ designed 1907 $20 Double Eagle — often described as the most beautiful coin ever minted in the U.S.

Buyers of the gold 2009 Ultra High Relief $20 Double Eagles can attest to the beauty and detail of that 1907 design. During the first day of Ultra High Relief sales alone, the US Mint sold 28,173. Despite the over $1200 price tag for one, the latest Mint sales figures show 56,527 have been purchased.

You might be wondering why Max Baucus, who is point on driving health care reform in the Senate, would concern himself with coinage.

It turns out that the only mine in the United States that produces Palladium is in Montana, and with the auto industry hurting, it’s a serious jobs issue for the State.

Commodity speculators may be on the outs with regulators in Washington right now, but it seems if you take a commodity and turn it into a coin to spark collector/speculator interest, well, that’s just OK.

In any case, I would love to see this happen.  Buying Palladium right now is incredibly difficult.  2005 & 2006 Canadian Maple Leafs are hard to find without a huge (30%+) markup over the metal.  Ironically, this crash of the auto marketplace is a perfect opportunity to invest in Palladium.  Not surprisingly, however, the lack of demand for the metal also seems to translate into a lack of vehicles to invest in it.

Such is the life of a contrarian coin investor.

Let’s hope Max can take a day off from the health care push and get this one passed.  Given it’s bi-partisan support, maybe it can help revive some form of bi-partisan cooperation in Washington…

Rick Mercer, Canadian satirist and TV personality, throws his brand of humor into the mix as he tours the Royal Canadian Mint in Ottawa.

Watch Rick as he walks through the Mint’s gold vault, checks out the gold refinery process, the Mint’s rolling room and finishes the tour by handling several gold coin blanks and striking some special coins.

Best coin video… ever. 

2009 Lincoln Penny Mania

A quick review of recently completed eBay auctions shows unmarked rolls selling for $30 to $50 each. Single pennies have sold for $2 to $4 each. Rolls with a Lincoln postage stamp and cancellation from the first day of issue at Hogdenville, Kentucky have sold for over $200. Most astoundingly, a single 2009-P Lincoln Cent graded NGC MS66RD and attributed “First Day of Issue” has sold for $400.

View the current eBay auctions.

It’s truly bizzare.  $0.50 rolls of the new Lincoln pennies are going for $30-$50 on eBay.  That’s insane.  We’re talking about a coin that will be minted in the hundreds of millions, if not billions, this year.

What I would love to do is to “short” these rolls – effectively presell them at this price, collect money now, and then send the rolls in a few months when you’ll be able to source them at less than $1/roll.

Unfortunately, that violates eBay policy. It’s for good reason, since short selling actual inventory is hard to distinguish from a scam transaction.  After all, how do you know the seller will make good on the future delivery?  What is the recourse for the buyer?

The lack of short selling, however, means that temporary supply/demand imbalances like this lead to effective price gouging for buyers who assume the eBay price is “fair”.  It’s certainly fair for the moment, but the expected ROI on this purchase for the collector is likely to be disasterous.

Still, I wouldn’t mind the ability to short sell a few hundred rolls.  If you have access to a bank that actually has these rolls, you’d be a fool not to put them up on eBay quickly, before the prices settle down.  Do I have any readers in Kentucky?  If so, can you pick me up a box?

It’s unclear what demand for this coin will look like, given its price.  (Likely $1200).  This announcement reflects the new US Mint pricing strategy for precious metals – basically a premium over market price, in buckets.  Still, gold coins continue to exhibit considerable demand, and this is an extremely flattering classicly-designed piece.

You can read more about the coin here on my blog, or here on the US Mint website.

Update (1/20/2009): Found this product page today on US Mint website.  Price is $1189.00, and delivery might take 6-9 months!  Limit one per household.   Talk about delayed gratification.

First, special hat tip to Mario Sundar for finding this lead.  Mario is not a coin collector, but he reads my blog often enough to know that I have a special interest in coins.  This one is a beauty, since it combines creative visualization with a unique engineering tale.

Here is the coin design:

Here is a brief description, from the Dutch Mint website, on the coin design:

A new 5 euro commemorative coin pays tribute to the history of Dutch architecture. Both our historical architecture as well as our innovative conceptual architecture and modern design are popular across the globe.

The Architecture five-euro coin was designed by artist Stani Michiels (b. 1973). The design on the obverse of the coin pays tribute to the history of Dutch architecture, with the portrait of Queen Beatrix being distinctively constructed using the names of important architects from Dutch history. The artist used the internet as a popularity-meter to determine the names’ order of appearance.

The reverse of the Architecture five-euro coin draws attention to the striking fact that many Dutch architects have also included publishing books on architecture in their professional activities. To illustrate this phenomenon, recent books on architecture rise up from the sides of the coin like buildings. Through their careful placement they combine to outline the Netherlands, while birds’ silhouettes suggest the capitals of all the provinces.

This blog post, however, from the designer, is where the real beauty lies.  It’s too long to reproduce here, but it goes into significant depth about the design inspiration, concepts, and visualization at work.  If you have a background in design, you will appreciate it.

Here is the summary from the post, and I think you’ll see why this contest winner gets substantial geek cred, as he goes into detail about the technology used in the coin design:

The whole design was done for 100% with free software. The biggest part consists of custom software in Python, of course within the SPE editor. For the visual power I used PIL and pyCairo. From time to time also Gimp, Inkscape and Phatch helped quite a bit. All the developing and processing was done on GNU/Linux machines which were running Ubuntu/Debian. In the end I had to collaborate closely on location together with the technicians of the Royal Dutch Mint (coin factory). So all the last bits were done on my Asus Eee PC. (I am still wondering why Asus doesn’t offer Ubuntu on its netbooks.) The Eee laptop took a bit longer (30 seconds instead of 3 seconds to generate a whole coin), but did the job just fine. For looking up the number of hits on the internet, I rediscovered Yahoo, which provides a much better api for automatic querying than its competitors. Of course the jury judged only the design and not the software used as others used Maya, Illustrator, …

And the winner is…
I am proud to announce that I won the competition! So soon 350.000 Dutch people will use the fruits of free software. I would have loved to release the coin under the GPL, which could maybe solve the financial crisis. However for obvious reasons I was not allowed to do that. There will be also special editions for collectors which can be bought world wide: a massive silver edition for € 30,95 and a massive gold edition for € 194,95. They will be probably sold out quickly as these are real collectors items. The coin is released in all Dutch post offices to the public the same day as the Intrepid Ibex: 30th October 2008.

You can purchase the coin here at the Royal Dutch Mint.  They seem to still have the gold version available, but no sign of the silver version.  Maybe it sold out?  If you find it, please comment here with a link.

The first coin sold for about 10% over the original purchase price last year.  Since that’s roughly the cost of eBay & PayPal fees, let’s just say that owning the coin did no damage financially.

This week, I have both Abigail Adams and Thomas Jefferson’s Liberty up for sale.

Bidding is on eBay all through the week.

Enjoy.

Let’s review the four Presidents that will be featured:

• William Henry Harrison
• John Tyler
• James K. Polk
• Zachary Taylor

I’m guessing the US Mint is already stockpiling coins to get ready for the stampede of demand. 

Actually, my guess is that given the waning interest in the series, we might actually be in the realm of coins that, 30 years from now, will be very hard to find.  Remember that, paradoxically, the least interesting coins generally end up with the lowest mintage and availability, and hence, the most value long term.

That assumes, of course, that there will be demand in the future to collect the series.  I’m not sold on that fact at this point, although the historical interest in the Presidents and the relatively low cost of the coins gives at least some hope.

In any case, if you think these four Presidents will be unpopular with collectors, can you imagine paying $2400+ for the gold First Spouse companion coins?

I thought not.

2007 First Spouse Proof Martha Washington Gold Coin

For those of you reading my blog for a long time, you know a couple things about my history with this series:

• I managed to get one of the first coins, even though they sold out within hours
• I wrote the top ranked eBay Guide on this series
• I was on the fence about collecting this series all the way through

I’ve decided that this series of coins isn’t for me… it’s too much cash tied up in coins, and frankly most of the first spouses just aren’t that interesting to me.  I may buy one or two in the future (Jacqueline Kennedy?), but I’ve decided to opt out of the full series.

As a result, I’ll be selling the first five off at a rate of one a week.

I think I’m going to steer clear of the more trendy, obvious collector-bait series going forward.  Yes, Native American $1 Dollar Coins, I am talking to you.  Of course, I am a sucker for truly beautiful new efforts.

Just remember, all bids on eBay are binding.  And you must bid from a PayPal account with a confirmed address.

After all, isn’t gold supposed to be a safe haven in times of financial depression and panic?  And if these aren’t times of financial depression and panic, what are?

After all, every country in the world is busy running their printing presses to fund bailouts and fight deflationary forces.  Gold should be on its way up, not down.

If you want to see a good article on the topic, there is some nice coverage here on Marketwatch

Gold futures hit a historic high above $1,000 an ounce a few days after Bear Stearns was taken over by J.P. Morgan Chase & Co. on March 14. But in the recent round of crises triggered by the collapse of Lehman Brothers Holdings Inc. gold has fallen to below $700 for the first time in 13 months. The metal has so far lost nearly $170 this month.

The reason, according to analysts at the World Gold Council, is that the latest bout of the credit crisis has been deeper and more far reaching. Funds were forced to sell desired assets such as gold to meet margin calls, while weakness in European economies lifted the U.S. dollar, which then pushed dollar-denominated gold prices lower.

This decade has seen an amazing boom in investment tolerance for non-traditonal asset classes.  People freely talk about how different new investment assets have a “low correlation” to the stock market.  Real estate, commodities, rare coins, art, collectibles, long/short funds, you name it.   As a result, across the world, trillions of dollars are now factored into different asset classes, prudently distributed to minimize risk and maximize reward.

This would all be fine except for one thing.  And it’s the one thing that more than anything led to LTCM’s demise.

That one thing is that all of these great measures of risk are based on historical records.  And as all mutual fund prospectus readers know, “past history is not necessarily indicative of future performance.”

You see, you can take two things that historically have not been correlated.  Asset A & Asset B.  But the minute that an investor owns both A & B, there is now a correlation that didn’t exist historically.  The investor is that correlation.

If Asset A goes down, and the investor needs to sell something, they may now turn to Asset B for liquidity.  And that means selling pressure for Asset B, based on nothing but the asset price of Asset A.  Voila, correlation.

Gold didn’t used to trade like a stock in an ETF that anyone could buy.  It was expensive, hard to store, and was distributed through inefficient, clumsy channels.  It was diversified from other investment classes because it couldn’t be bought & sold easily like stocks or bonds.

Now, buying a Gold ETF is trivial, and can be done for less that $10 a trade with very little spread.  In fact, many commodities can.

All of a sudden, in this market, people are realizing that the investors are the correlation.  And that correlation is much stronger than historical analysis would suggest.

Not to get to gloomy, but re-reading my August 2007 post, I caught this somber realization:

What’s worse, those historical models lead investors to believe that they have less risk on their books than they do have, which leads rational investors to introduce leverage into their portfolios.  That means when the risk shows it’s ugly head, the results get magnified by the leverage of loans.

That’s what happened to LTCM.  Their models were excellent, but they were based on historical correlation.  The minute some of their investments turned the wrong way, their incredible leverage forced pressure in previously uncorrelated investments.  What’s worse, other investors, smelling the “blood in the water”, discovered this new-found correlation, and pressed trades against them.

So, this scares me a lot, at least intellectually.  There are very good reasons why major investors like hedge funds and other asset managers can’t share their up-to-the-minute holdings.  That means, however, that no one really understands this type of “co-investment risk” that is building in mass across the markets.  Unfortunately, the only way I can imagine to properly handle this risk would be to have a universal monitoring set up to accurately reflect this new type of correlation from mass “co-investment” across assets.

Ugh.

If you haven’t followed the news, the financial crisis has led to a significant increase in demand for gold bullion coins.  Demand has been so high, in fact, that the US Mint temporarily stopped selling the 0.9999 pure gold American Buffalo coins.  As per the US Mint press release:

Demand has exceeded supply for American Buffalo 24-Karat Gold One-Ounce Bullion Coins, and our inventories have been depleted. We are, therefore, temporarily suspending sales of these coins.

Much of this demand has now shifted to the Canadian Maple Leaf coins, which are in limited supply, but still available.

Browsing the US Mint website, I noticed the following information for the new, 2009 Ultra High Relief Double Eagle, debuting in January.

Next January, the United States Mint will issue the 2009 Ultra High Relief Double Eagle Gold Coin. This coin promises to fulfill Augustus Saint-Gaudens’ vision of an ultra high relief coin that could not be realized in 1907 with his legendary Double Eagle liberty design.

2009 Ultra High Relief Double Eagle Gold Coin Obverse

The 2009 Ultra High Relief Double Eagle Gold Coin will show the Nation and the world the very best the United States Mint has to offer. The 21st century vision of the United States Mint, combined with technological advances, enabled the United States Mint to realize the previously unattainable goal of making the coin accessible to all Americans.

Through 21st century technology and the vision of Director Ed Moy, original Saint-Gaudens coin plasters were digitally mapped by the United States Mint. Using the digital design and die-making process, the Saint-Gaudens sculpture — in ultra high relief — has been updated to reflect the year 2009, an additional four stars to represent the current 50 states, and the inscription “In God We Trust,” which was not on the 1907 version.

It does look like a gorgeous coin.  But do we really need:

• The 22K Gold Eagle, in 1/10, 1/4, 1/2, and 1 oz. varieties, in proof and uncirculated versions
• The 24K Gold Buffalo, in 1/10, 1/4, 1/2, and 1 oz. varieties, in proof and uncirculated versions
• The 24K Ultra High Relief Double Eagle, in 1 oz.
• The 1/2 ounce Presidential Spouse coins, at a rate of 4 per year

The problem with collecting gold coins is that, well, they are pretty expensive.  With gold between $800 and $900 an ounce these days,  you can imagine the ongoing cost of trying to complete these series and collecting the different versions.

The new Ultra High Relief Double Eagles do look extremely interesting.  I hope to see one in person when they debut in 2009.

From the US Mint website:

In 2009, the United States Mint will mint and issue four different one-cent coins in recognition of the bicentennial of President Abraham Lincoln’s birth and the 100th anniversary of the first issuance of the Lincoln cent. The reverse (tails) designs were unveiled September 22 at a ceremony held at the Lincoln Memorial on the National Mall in Washington, D.C. While the obverse (heads) will continue to bear the familiar likeness of President Lincoln currently on the one-cent coin, the reverse will reflect four different designs, each one representing a different aspect, or theme, of the life of President Lincoln.

The themes for the reverse designs represent the four major aspects of President Lincoln’s life, as outlined in Title III of Public Law 109-145, the Presidential $1 Coin Act of 2005:

• Birth and early childhood in Kentucky (1809-1816)
• Formative years in Indiana (1816-1830)
• Professional Life in Illinois (1830-1861)
• Presidency in Washington, DC (1861-1865)

The new one-cent reverse designs will be issued at approximately three-month intervals throughout 2009. The Secretary of the Treasury approved the designs for the coins after consultation with the Abraham Lincoln Bicentennial Commission and the Commission of Fine Arts, and after review by the Citizens Coinage Advisory Committee.

For collectors, there will be a variety of coins.  You’ll likely see each of the four cents from both the Philidelphia and Denver mints (“P” and “D” mint marks).  It also looks like there will be true copper versions, with the same metal content as the original 1909 penny, from the San Francisco mint (“S” mint mark).  That’s 12 coins, at least.

For those who are interested, here are the four designs:

I don’t expect a lot of collector activity, largely because of the low nominal value of the coin.  Since there are always active movements to get rid of the penny, this might turn out to be the last hurrah for the one cent piece.

I wonder what the US Mint will charge for a roll of these pennies?

But time moves on, and I noticed yesterday that the U.S. Virgin Islands voted on their preferred design for their US State Quarter.  The U.S. is release 6 quarters in 2009, as an extension to the popular US State Quarter program, to honor the other territories that are part of the U.S., but aren’t states:

• Washington, D.C.
• Puerto Rico
• Guam
• U.S. Virgin Islands
• American Samoa
• Northern Mariana Islands

Here are the contenders and winning design for the U.S. Virgin Islands (thanks, CoinNews.net):

Here are the design options and final choice for Guam:

Here is the final design for Washington, D.C.:

I personally choose to collect the US State Quarters by buying the entire Silver Proof Set for the year from the US Mint.  It’s a highly liquid and known product, and having the coins in silver with the proof stamping process rather than base metal is clearly a more stunning representation of the coins.

The US Mint will cap off the official State Quarter program in the fall with the final original state quarter for the 50th State (with apologies to Senator Obama, not 57), Hawaii.

A friend of mine at work pointed me to this site, Retire the Penny.

For the most part, the call to retire the penny has been made on the back of two basic arguments:

1. Nuisance.  People don’t value them anyway, and tend to just stuff them in dishes, jars, piggy banks, or literally on the ground.
2. Cost.  With the rising cost of metals like copper and zinc, the cost of the penny has actually exceeded one cent, meaning that we lose money every year.  In fact, people are melting them down, illegally, spurring law enforcement action.

On Friday, May 9th, the US House of Representatives passed H.R. 5512, which gives the US Mint 270 days to change the base metal of the US one cent and five cent pieces to more affordable metals.  The current bill actually calls for “copper-colored steel”, although there are arguments for even more cost effective metals.  From CoinNews.net:

The House debated on the legislation and finally voted yesterday to change the metallic composition of the penny and 5-cent nickel to a less expensive copper-colored steel.

Although the prices of copper, zinc and nickel metals in coins have declined in recent months, the penny and 5-cent nickel still cost more to make than what they’re worth—resulting in a reported loss of about $100 million every year, or $1 billion over a decade.

It now costs about 1.26 cents to make the penny and about 7.7 cents to make the nickel.

House bill “H.R. 5512, the Coin Modernization and Taxpayer Savings Act of 2008” would seek to change those manufacturing costs by using copper-colored steal, which could cut the cost of making pennies down to about 0.7 cents each. But its recent passage in the House is no guarantee it’ll make its way to the White House for signing.

H.R. 5512 must still go through the Senate and then the President, and not everyone is happy with the current legislation.

Personally, I’ve always loved the steel pennies from 1943, the one year that they were switched due to wartime rationing of copper.  I even bought a few hundred on eBay just for fun.

Little known fact – Canada switched to a copper-colored steel penny a few years ago.  Who knew?

This type of change will remove the second argument against keeping the penny.  Personally, I think the penny is largely retiring itself. As more and more retail institutions display “give a penny, take a penny” dishes, they are effectively making the cent unnecessary for transactions.

This is all very interesting given that 2009 is designed to be a celebratory year for the penny, marking 100 years of the Lincoln cent, with collectible versions made out of pure copper.

If you aren’t following this, the 50 State Quarter program ends this year, in 2008, with the 50th state, Hawaii rounding out the end of the year.  Congress passed a bill that added one year to the program in 2009, to cover Washington D.C., Puerto Rico, and the US Territories.

Here is an article on the American Samoa submission.  Here is another on Guam‘s submission.  Kind of cool that it has a Spanish motto on it.

Here is an article about Washington D.C.’s submissions, which included the motto, “Taxation Without Representation“, a historical reference and sly cut at Washington D.C.’s current status lacking congressional representation.

“The new quarter will teach people across the country about our city and its history. It’s my hope that those who don’t know about our disenfranchisement will soon learn about it when they’re paying a toll or buying a soda.”

The US Mint rejected their submissions as too controversial.

“Although the United States Mint expresses no position on the merits of this issue, we have determined that the proposed inscription is clearly controversial and, therefore, inappropriate as an element of design for United States coinage.”

Nothing like a little drama around coin design.

It really irritates me that the US Mint doesn’t support the subscription option for these coins.  To me, the subscriptions are exactly what you want as a collector.  You decide to commit to a series, and then, automatically, when they launch new coins, they send you the coin and bill you.

I have subscriptions for a few series over the past five years, and they’ve been excellent.  No problems, no issues.

I’m still not sure I have the willpower to jump every 2 months or so to try and get one of the first spouse coins.

Just for reference, here are the 2008 First Spouse Gold Coins:

• Elizabeth Monroe
• Louisa Adams
• Jackson’s Liberty
• Van Buren’s Liberty

Moneyfactory.gov: The New $5 Bill

Here is the press release.  Here is a list of the new security features.  Here is the website for the new bill.  Here is a glossy PDF of the front of the bill and the back of the bill.

The new $5 bill incorporates state-of-the-art security features that are easy to use by cash handlers and consumers alike. Hold the bill to the light to check for these features:

• Watermarks: There are now two watermarks on the redesigned $5 bill. A large number “5″ watermark is located in a blank space to the right of the portrait replacing the previous watermark portrait of President Lincoln found on the older-design $5 bills. A second watermark – a column of three smaller “5″s – has been added to the new $5 bill design and is positioned to the left of the portrait.
• Security Thread: The embedded security thread runs vertically and is now located to the right of the portrait on the redesigned $5 bill. The letters “USA” followed by the number “5″ in an alternating pattern are visible along the thread from both sides of the bill. The thread glows blue when held under ultraviolet light.

No big surprises here, really.  These are all features we’ve seen on the new $50, $20, $10, $5.  They aren’t redoing the $1, so next up is the $100, which will feature 650,000 micro-lenses.

Interestingly, my blog post on the $100 redesign has now become part of wikipedia, generating regular traffic to this blog (at least a few hits each day).

Would love to see a $500 Bill and $1000 Bill, to match the 500 Euro note.  But I doubt we’ll see it soon.

However, as Coinnews.net reported today, the bill includes two key coin-collecting gems.

6 More State Quarters. Yes, you read that right. Just because we ran out of states does not mean that the US Government will let the best new coin series end without a fight. Six more coins will debut in 2009, highlighting 6 great territories that aren’t states, but still deserve to be celebrated with two bits:

1. The District of Columbia
2. The Commonwealth of Puerto Rico
3. Guam
4. American Samoa
5. The United States Virgin Islands
6. The Commonwealth of the Northern Mariana Islands

“…Coins minted under this subsection honoring the District of Columbia and each of the territories shall be issued in equal sequential intervals during 2009 in the following order: the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands.”

The US Mint Press Release is here. Designs for these coins have not been published yet, but I will post them here when they are ready. Note that this is 6 coins for 2009, not the normal 5 per year that have marked the program to date. Without this bill, the quarter would have returned to its old design in 2009, since Hawaii, our 50th state, gets its own quarter at the tail end of 2008.

No More Godless Presidential Dollar Coins. Or at least, they’ll be harder to come by. This bill also includes text that mandates that the text “In God We Trust” move off the edge of the coin, and to one of the faces. Due to space considerations, this will likely mean moving to the face of the coin with the President.The text was moved to the edge, of course, to give more space on the face of the coin for the Presidential image. But, with the release of the first coin, there was a large error rate with the Philidelphia mint version that led to the creation of “godless dollars“, with no edge text. Despite the fact that this problem has not been repeated with the 3 subsequent coins for John Adams, Thomas Jefferson, and James Madison, a cottage industry has sprung up of people sanding the text off the edge of dollar coins.

In any case, the bill does not say when this change will be made, but that it “shall be put into effect by the Secretary of the Treasury as soon as is practicable after the date of enactment of this Act.”

The full coverage from Coinnet.news is here and here.

Two thoughts on this news:

1. Holy 2009 Proof Set, Batman. Let’s count up the coins for the 2009 proof set:
   • 4 new pennies, to celebrate the 100th year of the Lincoln cent
   • 1 nickel
   • 1 dime
   • 6 new quarters, as described above
   • 1 JFK half-dollar
   • 1 Sacajawea dollar coin (first of the new Native American dollar coins)
   • 4 Presidential dollar coins

   That’s a total of 18 coins, and that’s not including the “P” and “D” versions, or any special proof varieties, like the copper-versions of the new pennies. That is going to be one fat proof set, likely 4 lens, minimum, at a pretty steep cost.  (Note: based on comments, I’ve correct the lines on the Native American dollar coins to correctly reflect their mintage at one per year, on the back of Sacajawea dollars.)

2. What price the original Presidential dollar coins? The original Presidential dollar coins may now become more valuable, as they may end up the only “edge-incused” US coins ever. Not sure how this will affect prices in the short term, but now that this is confirmed, it’s an interesting side effect.

From the US Mint Website:

Washington, D.C. – Director of the United States Mint Ed Moy joined Mrs. Laura Bush in the White House East Room today for a ceremony celebrating the First Spouse Gold Coin Program. The collectible First Spouse Gold Coins, inaugurated this year, mark the first U.S. coin series consecutively honoring women.

The designs for the 2008 First Spouse Gold Coins were on display for the first time during today’s ceremony.The new 2008 coins will feature images of Elizabeth Monroe, Louisa Adams, Andrew Jackson’s Liberty and Martin Van Buren’s Liberty.

“This is the first time in American history that women are featured on a consecutive series of coins,” noted Director Moy.”And, it is the first time our First Ladies are gracing coins made of 24-karat gold.”

Much of today’s ceremony focused on the final coin of 2007 honoring First Lady Dolley Madison, with Dolley Madison re-enactor Lucinda Frailly of Canton, Ohio, in full costume discussing the colorful First Lady’s accomplishments.Children from two schools near Montpelier, Virginia, the home of James and Dolley Madison, attended the event.

Mrs. Bush highlighted the historical contributions made by the nation’s First Ladies. “America’s first ladies have guided, comforted and sustained our nation in times of trial and triumph. At the same time, they’ve fulfilled their other very important role-and that is the wife of the President of the United States,” she said. “The East Room is the perfect place to honor these remarkable women, especially one of America’s most beloved First Ladies: Dolley Madison.”

The following images come from The US Mint Press Room:

Elizabeth Monroe

Louisa Adams

Jackson’s Liberty

Van Buren’s Liberty

In other news, you can still get your Dolley Madison First Spouse coins from the US Mint. The proof version price has risen to $529.95, a $100 increase from the first three coins. The uncirculated version is worth $510.95.

It’s unclear whether the higher price means that the value of the previous three coins has now risen roughly $100. We’ll see the pricing on eBay as this coin enters the market.

You can buy them here.

In case you are interested, I have rolls of all four of the 2007 Presidential Dollar Coins up on eBay, in my eBay Store, here.

The US Mint website has been updated with a slight change to the release date of the Dolley Madison first spouse gold coin. Instead of being released on November 15th, like the James Madison dollar coins, Dolley will be joining us the following week.

Here is the last of the new products schedule listed on the US Mint website:

The last First Spouse coin took much longer to sell out – I wonder if this will be the first coin to actually see a lower-than-planned mintage number? The current plan is to mint 20,000 proof and 20,000 uncirculated versions.

Update (11/17/2007):  If you are interested in buying James Madison original bank rolls, please see my post here.

Of course, these coins are already available in proof and uncirculated versions in the annual coin sets.  I have several of the 14-coin Silver Proof sets for 2007, and the lens with the 4 Presidential $1 Dollar Coins from 2007 is really gorgeous.

As usual, I will have rolls for sale on eBay.  I actually still have rolls available for George Washington, John Adams, Thomas Jefferson.  I even have a couple 2007 Silver Proof Sets for sale.

The Native American $1 Dollar Coin Program

It now joins my other four eBay Guides:

• Collecting the New Presidential $1 Dollar Program Coins
• Collecting the New 24K Gold First Spouse Program Coins
• Collecting State Quarters: Which will gain in value?
• The New 2009 Lincoln Cent (Penny)

Interestingly, these four guides have accrued enough positive  votes to make me one of the “Top 1000″ reviewers on eBay.  In fact, I’m currently ranked #275 as of the writing of this post.

If I get to the Top 100, I get a different badge by my user ID, and you know, I’m all about eBay badges.  So if you have an eBay account, vote “yes” on my guides to recommend them.  If you don’t like them, well, don’t vote “no”.  That hurts my ranking.

Bush Signs the “Native Americans $1 Coin Act”.

Here is my blog post about the bill, as it was in Congress.  From another blog, some additional coverage.
I guess both the House & the Senate get two thumbs down for passing this also.  I predict this will set a record for the lowest number of coins to make it out of the US Treasury vaults, ever.

In the final step before becoming a law, congress presented the president with H.R. 2358, Native American $1 Coin Act, for his signature. Introduced in the House of Representatives by Dale Kildee (D-MI 5th), and expected to be signed by the president, the bill calls for the reverse of the Sacagawea Dollar be redesigned every year to commemorate “of Native Americans and the important contributions made by Indian tribes and individual Native Americans to the development of the United States and the history of the United States.” The obverse will continue to have the Sacagawea design.

You know, this is pretty much “jump the shark” territory for coin series.  After all, it’s not like there is any demand for the Sacagawea dollar coins now.  Frankly, they haven’t even found a use for the original mintage from the year 2000.

The Presidential $1 Dollar Coins seem to have decent demand with collectors, but no one seems to be using these in circulation for obvious reasons – until the $1 Bill goes away, there’s just no reason to.

Creating new series of specialty faces on circulating coins is not a guaranteed winner… just ask the 10 people who actually cared about the 5 versions of the Nickel that went out in 2004-2006.  Oh, did you miss that series? 

The US is already dealing with:

• The end of the highly successful US State Quarter series, which finishes off in 2008 with the last five states.  Of course, H.R. 392 would like to extend it to the District of Columbia and the five US territories (Puerto Rico, Guam, Samoa, Virgin Islands, Northern Mariana Islands).
• The next decade of US Presidential $1 Dollar Coins, at a rate of 4 per year, through 2016 at least.
• The next decade of US Presidential First Spouse gold coins, at a rate of 4 per year.
• The new 24K Gold Buffalo 0.9999 pure bullion coin.
• The 2009 Penny series to celebrate a century of the Lincoln cent.

So, my apologies to the US Congreesmen sponsoring HR 2358. You can count me out on any series based on the Sacagawea dollar.

The price of gold has jumped in the last thirty days from a low of $648 an ounce to a high of $711.75. If you’ve invested in gold, you’re loving it. If you’re the United States Mint, you’re hating it.

The increased price of gold is affecting the US Mint’s bottom line. So much so that late this afternoon, September 13, the U.S. Mint suspended the sale of all their 2007 American Eagle Gold Uncirculated coins.

The Mint needs to adjust their prices, pushing them up higher. Here’s a listing of the suspended gold coins (at least so far) and their former prices:

• 2007 American Eagle Gold Uncirculated One Ounce Coin, Price: $749.95
• 2007 American Eagle Gold Uncirculated One-Half Ounce Coin,
  Price: $379.95
• 2007 American Eagle Gold Uncirculated One-Quarter Ounce Coin, Price: $195.95
• 2007 American Eagle Gold Uncirculated One-Tenth Ounce Coin, Price: $89.95
• 2007 American Eagle Gold Uncirculated Four-Coin Set,
  Price: $1,379.95

The following statement was posted on the U.S. Mint web site for each of the coins they suspended:

Due to the increasing market value of gold, the American Eagle Gold Uncirculated Coins are temporarily unavailable while pricing for this option can be adjusted; therefore, no orders can be taken at this time. We expect products to be available with adjusted pricing on or after September 27, 2007.

I’m a little surprised.  After all, the US Mint is largely working off inventory that has already been created.  I didn’t think the Mint was that “margin sensitive”.  Still, in the end, it’s not surprising that a sharp spike in gold prices would make them revisit pricing.

I notice that they did not feel the need to reprice the 1/2 ounce gold first spouse coins.  Maybe they were scared to given all of the fulfillment issues.  I’m still waiting on Thomas Jefferson’s Liberty coin.

This should be a boost for anyone who did order gold coins this year.  The eBay price tends to quickly jump to the latest coin prices at the US Mint plus some margin.  So, if you got the gold eagles at a cheaper price, you might be able to sell for an immediate profit.

I think that the demand today is crazy.I did actually get the first spouse coin page once… but it said it won’t be available until 12pm Aug 30th ET… of course, that was 15 minutes ago.  When I try to sign-in to the site, I get a page cannot load error.

I think the lightweight, low-end web infrastructure for the US Mint just gave up the ghost on this one.

 9:23 am PST: I’ve just managed to login… now trying to get back to the TJ first spouse page. Very slow, lots of page failures. But it feels like it’s getting better.

9:25 am PST: I’ve just managed to click “add to cart”. Let’s see if this goes through. My guess is that they started the rollout of the updated site configuration for the ordering at 12pm EST, but it took longer than expected to deploy. I don’t think the US Mint is set up for this type of “wire on” situation.

9:26am PST: I have two browser windows hitting the site now, which is helping. I’ve just clicked checkout. Since I have quick checkout configured, I’m hoping I’m close to home free.

9:29 pm PST: DRAT! The connection timed out. Lost my checkout. Trying to recover. I thought I was home free. Quick Checkout is failing… will try normal checkout.

9:31 am PST: Quick Checkout works again! I’m clicking “place order”… let’s hope this goes through. This is unbelievable.

9:33 am PST: Are you kidding me? The page is still loading. The place order has not completed. Do I stop? Do I try again? This is a surprising amount of suspense for a coin order…

9:34 am PST: The order went through. The coin is showing as backordered, but I have an order number. Crazy. I guess you have to be persistent these days to bag a first spouse coin.

Now, I have real work to do…

Interestingly, the boxes for the Thomas Jefferson bank roll boxes are white instead of brown. Otherwise, to my eye, they are identical to the earlier George Washington and John Adams rolls.

You can find the listing for the Thomas Jefferson rolls here on eBay.

I still have some John Adams & George Washington rolls remaining. I’ll be putting up a specific listing in case you might be interested in buying all three together.

AP :$100 bill to get high-tech face lift

I was just expecting the new $5 bill news.  As you know, the US started re-designing all of the major bills a few years ago.  We’ve seen the new $100, new $50, new $20, and in 2006, the new $10.  The new $5 bill is due in early 2008, and the US Bureau of Engraving has scheduled a media event on September 20th to reveal the new $5.

Well, listen to the technology planned for the next version of the $100 bill:

A new security thread has been approved for the $100 bill, The Associated Press has learned, and the change will cause double-takes…

The operation of the new security thread looks like something straight out of the Hogwarts School of Witchcraft and Wizardry. This magic, however, relies on innovations produced from decades of development.

It combines micro-printing with tiny lenses — 650,000 for a single $100 bill. The lenses magnify the micro-printing in a truly remarkable way.

Move the bill side to side and the image appears to move up and down. Move the bill up and down and the image appears to move from side to side.

“It is a really complex optical structure on a microscopic scale. It makes for a very compelling high security device,” said Douglas Crane, a vice president at Crane & Co. The Dalton, Mass-based company has a $46 million contract to produce the new security threads.

Let’s review some of the cool points in those short paragraphs:

1. 650,000 micro-lenses per bill.  My guess is they are using some inkjet-adapted technology to deposit these lenses on each bill.  Technology for paper-thin displays has been in development for almost a decade.  Still, the volume for currency production here, however, is amazing.
2. Hogwarts?  For me, any article with a Harry Potter reference is the better for it.  Then again, I am a big geek that way.
3. Next year.  The new bill will be available by the end of 2008?  Very cool.

Maybe we’ll learn more about this with the debut of the new $5 on September 20th.