Numismatics, are the study, selling, and buying of rare coins. It can be American coins, coins or bars salvaged from old ship wrecks on the floor of the sea, or any coins or bars which are rare. As an example, in 2016, the US mint at West Point New York, made, I think about 34,000 special Silver Eagles, celebrating the 30th year of Silver Eagle production. They made hundreds of thousands of regular Silver Eagles, but the special edition ones are slightly different, and are now commanding, I hear, $200 each. I cannot verify it, as I only heard it from a friend.
Numismatics, to me, are used cars. Used cars, because their value is in their condition or age, or also the sales ability of a used car salesman. “Here’s a great buy. This baby was only driven to church on Sundays by the little old lady who traded it in for a new one.” Oh sure. Ever been burned by a used car? I have…several times. Numismatic coins, are far less problematic if they are graded by a reputable professional grader, such as PCGS, which stands for “Professional Coin Grading Service.” Professional grading costs about $25 per coin, and grades are indicative of their age, maybe “first strike,” or ‘MS” (mint state) meaning their condition now, compared to their condition when struck by the mint. “MS 70” is extremely close to their original condition. The grades go down to “BU” which is ‘bright uncirculated,’ or ‘AU’ meaning ‘almost uncirculated,’ etc. Even with professional grading, their selling (ask) price or buy (bid) price is at the whim of the dealer, and whether he is honest or needs the coins. Dealers need to get a return on their inventory, and if they hold lots of coins and bars, their capital is tied up in that inventory, meaning they will pay less so they can get a return on their inventory capital. We have no inventory. When we broker coins, they are shipped from our supplier who has the inventory, not us. We have no employees either, so our operation is extremely efficient.
The more shady dealers will offer a coin which looks good, and tell the potential buyer that he hasn’t had time to have it graded, but it obviously an MS 63. Nonsense. He is a used car salesman. To grade a coin, the professional uses strong magnification and experience, not just surface appearance. Professional coin graders, such as those employed by PCGS, are well paid, and experts in their field. If a person wants transportation in an automobile, he or she will buy a new car, or if funds are not up to that, a used car in good condition from a reliable dealer. The car is used for transportation. Bullion coins and bars are for savings, just like a transportation automobile. A wealthy person may want something more exotic and shop for an antique car, rare car, or a car needing restoration. These cars are not for transportation, but for personal pleasure, and are rarely good investments. They require garage keeping, insurance, and kid glove handling. They are rarely used other than to be shown. Locally, where I live, is an antique car club, which I don’t belong to, even though I own a pristine 76 year old truck, an also pristine 29 year old Mercedes, and also a superb 31 year old Jeep. I use them, keep them clean and well cared for, but that’s it. They are for hauling stuff, going places, and Jeeping in the mountains. The local guys take their cars and all congregate on Friday evenings at a local restaurant so passers by can stop and look at their vehicles. Not me. Like my cars and truck, I use them for transport. I save not in dollars or numismatics, but in bullion gold and silver. Gold and silver which are not numismatic, but ‘bullion’ types, which are priced closest to spot price.
Speaking of the ‘spot’ price of silver and gold, no one can buy gold or silver at the spot price. The spot price is the price given at the mouth of the mine or at the end of the milling procedure. Gold and silver, after mining and milling, needs to be manufactured into coins and bars, and transported to a distributor, who makes a tiny profit on huge volume, and distributes it to dealers such as us, which is Colorado Gold. The costs to manufacture, transport and distribute coins and bars, has to be added to the cost of the stuff, meaning that a bullion coin or bar is the closest to the actual spot price. TV advertisers also must add their cost of advertising. We do no advertising, and never have, so our prices are as low as is virtually economically possible. While the phrase at the top of these columns says that they are my opinion, and not of Colorado Gold, this is in error now that I no longer write about politics. These columns are the opinion of Colorado Gold from now on. I may be technically ‘retired,’ but I am still around to write these.
It is easy to compare antique cars and trucks, or antique stamps, furniture, clocks, homes, etc, with numismatics. Numismatics are not easily disposed of, unlike bullion coins and bars. People regularly call us and want to sell their coins or bars. There is no age or condition price, but the bullion price which is easily found on our web site by clicking on ‘How to sell.” The prices are there, and that’s the price we will pay. As I am writing this, a client I have dealt with over the years, called me and said that a neighbor of his has four $10 gold pieces (US) which she wants to sell. They are graded, and he called me. I told him that we don’t deal in numismatics, but if she needs the money quickly, I will buy them for the bid price of a half ounce Gold Eagle, which now is $640. They may be worth more, I don’t know. She needs to go to E-Bay maybe, or a coin shop, which there are none anywhere near her. That’s the problem with numismatics. She obviously paid good money for four graded US coins, and now that she wants to sell them, where can she go? Had she bought four half ounce Gold Eagles from us, the price is right on the web site, and we charge a flat $25 fee to cover paper work, etc. She would have to ship them, and the address to ship them is also on the web site. It’s all so simple with bullion stuff and ever so complex with numismatics.
No more political columns, as they do no good and change nothing. We are in the precious metals business, so my columns will be about economics from now on. – Don Stott