The release of the 2010 America the Beautiful 5-ounce silver coins is the hottest issue in the modern U.S. coin segment of the market. For example, it dominates coin discussion forums, numismatic web sites, and letters to the editor of major coin publications. Not surprisingly, the release of these coins raises some important issues for the coin industry and the collecting community.
The controversies surrounding the release of these coins have negatively affected public perceptions of the U.S. Mint, Authorized Purchasers (AP’s) who distribute bullion products for the Mint, and coin dealers in general. The Mint has been repeatedly criticized for not distributing the coins directly to the public, even though it lacks the legal authority to do so, and many collectors believe that high pre-order premiums initially charged by one AP is what started the whole mess. Others are suspicious about how secondary market dealers have obtained so many sets since they are supposed to be sold directly to the public.
Meanwhile, collectors continue to try to obtain the coins from nine AP’s, most of which have suspended sales until they can implement a retail distribution system for the coins. Those which have already offered coins for sale quickly sold out of most of their allocation, and orders were very hard to place because of overloaded phone lines and web sites and an avalanche of mail orders.
The Mint has yet to announce when sales of the numismatic version of these coins will begin other than stating that it will be in the first quarter of 2011. With so many collectors having difficulty obtaining the bullion coins from the AP’s, Mint officials may be able to limit some of the damage to the Mint's public image by providing a release date for the numismatic versions as soon as possible.
[Editor's note: The US Mint provided the following response to a recent inquiry: "No release date has yet been set. We are working to develop a plan ensuring the widest and fairest distribution of the coins. We will provide more specific information as details become available."]
The low mintage of these coins, the fact that they are first year of issue coins which always command substantial interest, and all the problems in obtaining them have driven interest in them through the roof. On the secondary market, raw sets are fetching $2500 or more, sets graded with the designation “Choice BU” or "Gem BU" are bringing close to $3,000, and numbered graded sets (MS-68 and 69) are selling for $4-5,000 and more. In addition, the grading services are reporting that so far no 70’s have been found, and that many of the coins have bag marks and other quality problems. As a result, some dealers are speculating that a graded 70 set could be worth tens of thousands of dollars, if one is ever discovered.
In my view, these coins are an excellent way to add silver to one’s portfolio, depending on the price paid. If one can obtain them at the price AP’s are required to charge (which averages about $950 for the 5-coin set), one is purchasing the coins for a premium over melt that is comparable to that for American silver eagles, which are produced in the tens of millions. It’s hard to predict future prices, particularly since the numismatic version will have a lower mintage (27,000). But at $950 a set, I see little downside, especially if silver prices continue to increase at a fast clip, as most metals experts predict.
Some have predicted that secondary market prices will fall dramatically in the future because current prices, in their view, are driven by collectors and speculators who are “flipping” their sets for quick profits. But my discussions with fellow collectors and investors lead me to believe that many of them will hold on to their sets because they plan to collect the whole series, or because they feel the coins will increase even more in value later. Many have compared these coins to the 1995-W silver eagle, which has a comparable mintage of 30,125 and today sells for about $3,000. In 1995 collectors were only able to obtain the West Point-mint marked coin if they purchased a gold coin set which many felt they could not afford. The coin became the key to the silver eagle series.
In addition, because the recent coin modernization legislation (Public Law 111-302) allows for future coins to be between 2 ½ and 3 inches in diameter, there was speculation that these might be the only 3-inch 5-ounce coins the Mint would produce. However, the Mint recently announced that despite having this authority, it would be too expensive to change formats at this point, and that doing so would result in further delays in the program. The decision to retain the same format in the future is good for series continuity, which should help attract future collectors to these coins.
For the past month, collectors and investors eager to obtain the new coins have repeatedly called AP’s and checked their web sites for information. In most cases, the AP’s have continued to post messages asking the public not to call and to wait for more information. Rumors began to spread last month that some AP’s were violating the new terms from the Mint, and that the real reason for the delays is that the AP’s were seeking to obtain exceptions to those rules to allow them to develop a wholesale market for the coins rather than sell them all retail.
One AP is rumored to have sold a large quantity to a dealer, but there has been no confirmation of this information. There may be no truth to those allegations, and the dealers selling the coins may well have obtained all their sets from the public, but rumors continue to swirl and many collectors are outraged by the whole affair. Some people have said they will never again deal with the Mint, or APMEX, because of their views on how they handled the release of these coins.
Those who criticize the Mint for not distributing the coins to the public seem not to understand that the Congress requires bullion coins to be distributed through the AP network. However, since the unexpectedly low mintage (33,000 sets rather than 100,000 as proposed) created an instant rarity, it obviously would have been preferable to have the Mint sell them directly to the public to allow for a fairer and wider distribution of the coins. But for that to happen the laws need to change. It may well be time for the Mint to work with the Congress to develop a better distribution system, possibly by ending the AP network and allowing for direct distribution of bullion products. At a minimum, the Mint should be given the authority to sell to the public any bullion items made in such small numbers that they are actually numismatic products.
Louis Golino is a long-time collector, numismatist, and numismatic writer. His articles have been published in Coin World, Numismatic News, and other publications. He has also written widely about international politics for newspapers and web sites.
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+1 I totally agree.
“At a minimum, the Mint should be given the authority to sell to the public any bullion items made in such small numbers that they are actually numismatic products.”
Agreed, but Congress seems to have a very protectionist attitude towards reserving authority (power) to itself, so I just don’t see this happening. I could see some in Congress arguing that this would give too much control to the Mint on the basis the Mint could control distribution simply by varying production levels. I think it would be an improvement, but in my opinion there is too much of a “junk-yard dog” attitude among many politicians for it to happen any time soon.
Thanks for your response, Bob. You raised some very interesting points.
Just wanted to add that I hope no one read criticism of any particular political group into my comments. I was actually thinking of the rejection of the request to give the Treasury Secretary discretion over circulating coin compositions, and the biennial reports required by the “Coin Modernization, Oversight and Continuity Act”.
re: One AP is rumored to have sold a large quantity to a dealer, but there has been no confirmation of this information
How did HSN get 201 full MS 69 sets before anyone else had them.
How did Silvertown get 50+ sets.
How did several other dealers get + + .
If an AP only sells (or gifts) these sets to existing clients while staying within the 1 per HH, does that agree with the Mints directive to ‘make availible to the public? ‘
Also, the Mint said they would not change the Diamater, but they have not said if they will continue the edge lettering or not? Per the congressional update, that is an option. Any confirmation on that?
thanks.
A new law should be passed to take these coins out of the 9 AP hands & offer these coins to the loyal U.S Mint subscription holders. Too many retailers are getting a hold of these coins & making HUGE profits on them.
So far the article is a perfect summation of the issue. Thank you
I like how the authors main reason for the mint not doing the right thing is “because its the law” what a tool the law says this so it HAS to be right….you people are serious tools typical american pieces of crap….
if the law required you to turn in the jewish family hideing in your neighbors attic i guess you would because that was the law…
o the law says i have to so i guess thats that…
how about you fools grow a pair and start thinking for your self do what YOU know to be right…
From what I heard, the Mint believes they had the legal authority to distribute the coins themselves and had seriously considered that option. However, they elected to give the APs another chance since it was only one AP that had started selling the sets with an inflated price.
It also needs to be pointed out that the Gold Center (Springfield, Illinois) is the one AP that has been the subject of most of the controversy. It has been reported that the owner sold most of his sets to his best customers, not to the general public. It is believed that the majority of the sets being sold on EBay now are from the Gold Center hoard.
The APs that are believed to have followed the Mint guidelines so far are MTB Coins, Fidelitrade and A-Mark Precious Metals.
It makes me laugh when I see how some people insist on defending the mint’s actions here. How stupid could they be ? If the management at the mint honestly did not think that the public would get gouged here, then they ALL need to be fired and replaced with more qualified people. I feel the law that only allows them to sell to AP’s is a very very convenient way of the mint getting over on the public and taking care of its friends (the AP’s). Plain and simple. That law needs to be repealed or modified asap. But, now with no one running the show at the top, don’t expect anything to change soon.
It was stupid and ridiculous for the Mint to release these coins and think that any of the AP’s would trade fairness for ‘greed’. The AP’s certainly knew that they would be able to command ‘huge’ premiums with the limited amount of coins being produced and the price of silver skyrocketing. Again our goverment has chosen to allow the rich to get richer. Their actions were indefensible and it is the average collector who gets the shaft by having to pay a huge premium for bullion coins or just not have them at all.
If I was an AP and I could make $1000+ a set for my 3300 sets I think I would Take my 3-4million and tell the mint to keep their bullion! Just as Gold Center did!
I began writing Director Moy directly to the Mint, not to the offsite in the midwest, to make sure he got the vitriolic letters I sent after the first several were ignored. When I started writing him—about the lack of silver eagles that year except for APs—I got an actual response from one of his lackeys. Of course it said nothing of value, except to cite the current meaningless law that insures 25 companies make an enormous profit on the most collectible coins the mint produces (I’d like to see the record of campaign contributions to the President and the legislators who vote on the laws—I would bet my 2008 Celebration Gold Buffalo that large contributions from the APs are strewn throughout the campaign funds of those on the committees and other key representatives). The ATBs just magnify the extant problem of not retailing directly to the public rather than the APs. It is an old Republican ploy of making the rich richer while oppressing the majority of Americans into impoverished lives. With me, I began boiling over silver eagles, a coin that does not have the ability to enhance its value like the ATBs, but the principle is the same: one incredibly small group of companies with enormous financial reserves, the main factor in how the mint chooses and restricts the APs, is given discriminatory access to a GOVERNMENTAL SERVICE WHILE IT IS DENIED ARBITRARILY TO ALL TAXPAYERS AND OTHER CITIZENS. As I recall from law school and twenty-five years of practice, this GOVERNMENTAL ACTION denies equal protection to all except the APs, it violates due process insofar as the simple definition of that is being fair (or treating those similarly situated the same), and possibly it violates anti-trust of Federal Consumer laws under the FCCC. This is a class lawsuit against Director MOY and the Mint just waiting for a class action firm to bring it on. I am ready to be a named plaintiff in such a suit. I have collected coins for about 15 years but did not discover this dirty, illegal secret until a few years ago. I never did class actions or I would file it myself. Please, any attorney with the guts to take on the government should contact me, Johnie O’Neal, at iansplanet@cox.net or 918-836-4568. Not only am I a plaintiff, but I am an appellate advocate who had the ruling in one Oklahoma case take 51 defendants off Oklahoma’s death row. I’m not bragging, just trying to establish a little credibility when I say that this practice by the Mint, even if justified under current law, is illegal and should be stopped. Surely there is a firm or an attorney who wants to get richer. Class action fees are enormous, as class action lawyers know. For that specter alone—a class action suit it would have to defend—the Mint and Moy should be having nightmares during waking hours. The People are waking up to the ripoff that has gone on for years. NOW IS THE TIME TO PUT A STOP TO IT AND THIS IS THE WAY. Forgive me for being long-winded and a zealot when it comes to our constitutional rights, but with Homeland Security we’ve lost enough and its time, as Jefferson believed, once again to spill the blood of the tyrants acting illegally. If a tax on tea was enough to spark the Revolution, then a pox of APs, the Mint, and MOY should be in someone’s crosshairs. The best bullet is the ballot box backed by the federal judiciary. A three inch coin should be easy to hit.
Didn’t the mint years ago (late 60s, early 70s) find bags of uncirculated morgan silver dollars and offer them to the public? It was almost a lottery in that you could request certain dates, but you would get what they had left over if they ran out of your requested date. There may have been a limit, but you had to pre-pay to play. Is this how they will handle the numismatic version with all the interest in this series? That is, limit orders to five coins per household and put all orders into a hat and draw until they run out.
Thanks for your comment, Jim D. It sounds like you are referring to the Goverment Services Admin. (GSA) multi-year release of Carson City dollars which started in the early 1970′s and ran for a number of years. I will be discussing that in future articles. As for the bags of Morgans, I think what you are thinking of is that through the early 1960′s one could still sometimes get entire bags of silver dollars at the bank in exchange for the paper money equivalent. David Bowers bought a lot of those bags in the late 1950′s and early 1960′s when he was a young coin dealer. If any readers were able to obatin those bags of Morgans, please tell us about your experiences.
Those of you who feel very strongly that the laws that govern the Mint need to be changed would do well to contact your member of congress and voice your opinion. We may not be lobbyists, but we can still make our voices heard.
Sorry, that should be “anti-trust or Federal Consumer.”
Apparently the first MS70 set has been discovered. It is graded by ANACS, which is an excellent company that grades accurately, but in the marketplace ANACS coins are usually worth less than NGC or PCGS coins. But since this is the first 70 set (at least to my knowledge), the price is sky high. Search e-Bay and you will see the owner is asking $47K for it!!!
Write your United States Congressman and complain. http://www.house.gov & http://www.senate.gov
There is no need for the mint to use these middle men to distribute silver coinage. It only serves to drive up the price for citizens. The mint should distribute them through the Federal Reserve banks just like currency. The system is already in place; why re-invent the wheel?
The PEOPLE got screwed again. Why are the distributors not distributing? What is the holdup –no pun intended. I just saw a set on E bay for $9,000. The government cannot management any program with making it confusing and expensive.
Personally I think the fact that the “perfect” set graded by ANACS is not selling and hasn’t garnered much attention just goes to show that ANACS is not respected as much as NGC or PCGS. Would either NGC or PCGS give the same coins a perfect 70… Maybe we’ll never know.
I too have wondered why the APs aren’t releasing all their coins. What is APMEX’s excuse? Supposedly they’ve only sold 1,000 of their allotment.
It doesn’t matter what people list their coins for in eBay. What matters is what people are willing to pay. The most anyone has paid yet is $5,699 for a whole set. The $9,000 listing is not for a whole set but rather for ONE coin – a Mount Hood graded MS-68 by PCGS. Not even a 69! The seller is obviously fishing for a sucker. Sellers like that should be banned from eBay.
Dave,
I agree no one in the right mind would pay what the owner of the ANACS 70 set wants. However, what you said about the highest prices realized so far is not correct. Do search for completed sales, and you will see individual PCGS and NGC 69′s have sold for $2K and more for each coin, and someone paid $3800 for a 69 proof-like Yellowstone and $3500 for a P-L Yosemite. That’s for one coin.
Thew owner of the ANACS 70 set has lowered their bid to 25k. I watched a few of those auctions where PCGS 69′s sold for over 2k. Hey if that’s what the market is currently buying, I can’t argue with it.
It will all settle out eventually, and with lower prices I hope, as I’m still waiting a bit to buy.
You wrote, “Those who criticize the Mint for not distributing the coins to the public seem not to understand that the Congress requires bullion coins to be distributed through the AP network.”
If the Director of the Mint was competent he would give Congress the necessary feedback and propose changes. I do not buy the poor Mint story. What was the Mint’s input when it was set-up this way?
I have never understood the rationale for the AP program(other than the rich get richer axiom), but I will contact my congressmen with the demand for it’s dismantling. All I want is one coin from the ATB 5 oz bullion program. That is all I can afford. This is just one more instance where the powers that be are out of touch with the common man. When I started investing in silver a few years ago, it was $18 an ounce. Where else can you get this kind of hedge against a failing fiat dollar. I suggest all who read this contact their congressmen(or women) with your input on the AP program. Tell your friends too. If enough people contact them, they will at least consider what we, the people want. Sorry for being long winded, but I feel very passionately about this antiquated Authorized Purchaser program.
John, at this point, your best best for a 2010 coin would be to try to get one of the numismatic versions of the 2010 coins from the Mint. The first one goes on sale on the 28th. If you miss that, try to get one of the others. If you prefer a bullion coin, I believe the 2011 coins will be sold individually by the AP’s and there will be a lot more made, so it should not be too hard.