Saturated modern coin market...

Hey everybody. I'm new to this forum, but I've been collecting coins for a few years now.

I've got a question for some seasoned-coin collectors though: what' going on with the census numbers for modern US coins?

For example, I see the gold buffalo coins that just came out for 2006 and 2007...well, the amount of coins in MS70 are just crazy! I can't find the official census figures on NGC's web site, but I see people on ebay selling them, some offering 100 coins graded in MS70 in a single auction!

I was so happy when the US Mint came out with buffalos in 2006 thinking, wow...here's my chance to start a really nice collection from the first year! Only now, I see last year--and also this year--are only worth their proverbial weight in gold because there's just too many of them!

I look at silver eagle sets minted in ms70 and from 1986 to present, it looks like those sets are worth over $40,000!

So my question is, why are so many people grading coins now...why were there such low census figures 20 years ago and now today the market seems saturated?

Does anyone know of any new modern coins the mint may be coming out with that everyone and his brother WON'T send out for grading?

Thanks for any comments.

 

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Welcome to the forum fivespot.

Now I ask what grading companies are putting out 100 MS70 coins at a time. That could have a lot to do with it.

The technology is there but so are a lot of "overgrading" slabbing services.

I really am curious as to what companies all of these MS70 coins are coming from. PCGS and NGC do their share of MS69 but not a ton of MS70.


I am not a modern collector so what will get hot next? Anybodys guess. Even mine.

 

Thanks clembo!

Well, for example there's a guy on ebay right now selling 10 MS70 buffalos for about $10,000. But I know for a fact in the summer time, there were sellers selling bricks of slabbed ms70 buffalos. Around $50,000 for a brick of 50, $100K for 100 slabbed coins.

For some reason, NGC took down the population report for buffalos, but I do remember the numbers were so inflated, it seems like they'll never be worth more than their gold content.

So aside from investing, what's the point of collecting them?

The reason I ask this question is I look at a 1991 Silver eagle. In MS70, the coin is 1 in something like 60 according to the pop report. 1 in 60!

So why are there thousands of buffalos and eagles in MS70 today? Has coin collecting really gotten that popular? What does this say about modern coin collecting?

 

It's making a quick buck at the expense of unaware newbies or gullible idiots.

It's almost the same thing that happened with the Comic Book Market in the 90's. So many new "investors" thinking that by buying the latest comic in bundles with the shiny variant cover would make them rich.

IIRC, the comic market is still reeling from that one.

 

you asked what the point of collecting them is? Well, if you have to ask, then there is NO reason!!! For those of use who have no need to ask, its because the coins is so darn beautiful in their own right, that we just had to have one, two, three.. or whatever.

You might think that the only reason to buy one is to sell it later for inflated or increased prices. And that is ok, im not saying its not. but its not the only reason to collect them! (my opinion of course)

 

I think you answered your own question there. There is no point in collecting modern bullion coins except for the bullion value itself. Obviously there will never be any numismatic appreciation in them because so many were made. There is no history behind them. There really is no reason for them to exist at all, except to have as bullion accumulation.

So, those paying a steep premium based on a points based scale for these type of coins are literally throwing their money right down the tube, much like those that thought they'd make a killing in "rare" comics in the 90's, like mentioned above.
Guy~

 

Thanks guys.

See, when I first started out, I had it in my head that it might be better for a beginner to start with modern bullion coins, simply because at the very least, they'd retain their metal value.

And that's where I ran into a problem. I'm still afraid of paying more for a coin than the actual metal value. I have a hard time considering paying 4, 5, maybe even 10x the coin's metal value. I thought with modern bullion coins, well I buy the coin new and hold on to if for a while. If it turns out the metal price rises, and also the coin happens to be rare in time to come, well all that's just an added bonus.

But it doesn't seem to work that way anymore, whereas like I mentioned earlier, some graded bullion coins wtih high points are quite rare, and they were minted only 15-20 years ago.

 

Your question/problem is not simple.

There is the word COLLECT which assumes you are doing it for the enjoyment

If you are collecting to make money, than that is technically an investment. For example, I used to collect stamps. At the time (years ago), there was a possibility that they might be worth something someday.

I still have two big stamp albums with a lot of stamps purchased in the 60's and 70's. Many of them are absolutely beautiful - but are worth about what I paid 40 years ago. I spent that money so long ago, that It doesn't even bother me.

In any case, everyone makes the Invest/Collect error (myself included).

But if you say you are COLLECTING something, the future value should have nothing to do with it. It's like collecting shot glasses or bottle caps. (and I know someone is going to say that shot glasses or bottles caps are worth something....)

 

It's an understandable idea, but no modern bullion coins will ever be rare. They do fluctuate with the price of bullion, just like any other coins. But, if I were you, I'd look at older gold coinage. A lot can be bought for comparative prices as moderns, which is just above bullion price, plus it maintains a history and in most cases a much lower mintage number. You're not guaranteed any more success, but like has been mentioned on this site a million times, coins are not the wisest investment.
Guy~

 

moderns

I really am curious as to what companies all of these MS70 coins are coming from. PCGS and NGC do their share of MS69 but not a ton of MS70.

i'm wondering how the tpgs can even come up with a grading set to refer to when grading a '70' !?

steve

 

The Mint seems to have improved their production and packaging techniques, people handle them more carefully, collectors return coins that aren't "perfect," and TPGs probably slightly inflate the grades compared to the past. A huge number of these coins seem to get slabbed because the pedigree commands a higher price for relatively common coins with differences in condition that are all but invisible.

The result of all of this is that 70 is the new 65.

I tend to treat all of the modern commemoratives and bullion coins as, well, bullion. I'll only buy them on that basis which frequently means not at all.

 

Modern coins can be graded much cheaper than the older coins. That is why the census for modern issues is so high. As far as the gold buffalo, nearly 70,000 have been graded in the MS category of one major grading service. Over 37,000 of those were MS70 Coins. The mint state buffalos are recommended for IRA accounts(Not the proofs). The Proof buffalo for 2007 has a maximum mintage of 200,000. You might want to collect the proofs instead, around 3000 coins in the 2006 Buffalo NGC PF70 first strike(Over 37,000 in MS70 first strike).

 

The market has clearly changed with respect to moderns over the past 20 years. Early on there were far fewer people willing to pay a strong premium for slabbed moderns. One grading service went as far as to ban their submission. TeleTrade refused to sell them for some time. There were no Internet sales. Most local dealers laughed at them and would not buy them from customers, so there was little-to-no market for them. Grading fees were also higher. If you wanted a modern coin slabbed, you needed to pay $22-$25 to have it graded. You also needed to go thru an authorized dealer, of which there were far fewer than today.

Today, everything is much simpler and cheaper. If you want them graded you do not need an authorized dealer. Costs are $6-$12 for slabbing. You can sell them on eBay, TeleTrade, and a host of other sites. Dealers will buy them more than in the past. Bulk submissions have also been introduced. Instead of having to pay for every coin submitted no matter how poorly it grades, you can only pay for those that meet your minimum grade and even then the submission costs are significantly lower.

Also, quality levels have drastically changed. 20 years ago if you wanted to get high grades, you actually had to know how to grade and look thru sets for the nice coins. Today, you just place an order for a large quantity of sets from the Mint and ship them off to a TPG without looking at them. A few days later you get them back in shiny slabs. Today, anyone can do it and if you know the game, you can make money.

As for gold Buffalos, there is a large group of people who are willing to pay a small premium for the coin in a slab. You're talking an $800 intrinsic value. Add a $20 premium for the numismatic value. To get it slabbed you're looking at $6-$12 more. The big submitters submit in massive quantities and they know they're going to get a bunch of MS70s that will bring more than the cost back. The MS69s can still bring a minor premium.

The census numbers are available for the gold Buffalos at NGC. They're listed in the Gold Eagles section.

I do not believe you will find a coin for sale at the Mint that will not be heavily submitted. Too many people know the game and as more people figure out how to play it properly, more and more coins are going to be submitted.

 

But when does submitting Modern Coins with MS70 grades become abit too much? Sure theirs a finite supply, but how finite is it really? In a sense, when will it "bottom out" and correct itself?

 

Agreed. And it had a lot to do with PCGS giving out the 70 grade too easily in order to try and recapture their niche market that they outright lost to NGC.

The market used to be PCGS giving out no/extremely few 70s and NGC giving out a bunch. The PCGS coins were worth a small fortune in 70 and nothing in 69 - less than bulk grading fees. The NGC were worth a decent premium in 70 and nothing in 69. It's pretty easy to see who you're going to submit with if you're going to get 1/3 decent winners and 2/3 losers or 99% losers and 1% big winners. This is why NGC grades significantly more moderns (and all coins in general) than PCGS.

PCGS finally woke up and opened the floodgates. Now it's 10%-15% winners and 85%-90% losers. NGC pretty much went on with business as usual. What PCGS didn't seem to count on was the dramatic drop in value a PCGS 70 would have. No longer are they $800-$1500 coins, but $100-$150 coins. At the same time the market saw all these PCGS 70s and all these NGC 70s and the price gap between the new PCGS prices and the NGC prices has closed greatly. It's no longer 10X or 20X, but maybe 2X-3X for many coins. That ony encourages more submissions to NGC which gives out more 70s and more of a dying market.

 

WELLLLLCOMMMME.
As to what is going on. Similar to a feeding frenzy by sharks with an abundance of food. Our Mint has in the past attempted to create a coin hoarding situation so they can continue thier jobs. By this I mean eventually there will be no use for coins or currency anywhere. It is coming. Note the already massive increase in credit/debit cards everywhere. Have you seen those Visa commercials where everything is moving fast and efficiently until someone attempts to pay in cash. Cash is doomed. With the constant intercontinental commerce increasing, our monitary system is becoming a white elephant, so to speak. Soon only collectors will be hunting for the last of our monitary system left. Sort of like Beanie Babies or Baseball/Football cards. Note Europe has already attempted to standardize the monitary system , making all previous European coinage a thing of the past. In order to simplify all trading between countries, only the plastic cards will be usable where the computers will standarize WORLD monitary systems.
Our Mint tried to make coin collectors back in the 70's with the Bicentennial coins and that failed. Now they are going crazy with Baby sized Dollar coins that no one wants, a constant flow of commemoratives, State Quarters, Gold, Silver and Platinum coins of all types and sizes. With the population of the US at 300,000,000 there are now more coin collectors than ever and most are temporary. The craze will slow down soon enough and prices will either stabilize or deminish.
For now there are a constant flow of new grading services, TV coin shows, Coin shows everywhere, new coin stores opening, coin dealers at flea markets and more more coins on ebay than is imagineable. A new and constant flow of coin books and magazines. New grading standards being created by anyone that wants to create one. AND the flow of counterfeit coins and now slabs is also proof of the feeding frenzy.
BE CAREFULL OUT THERE.

 

What's with you and the Mint? Did they fire you just before Christmas in the mid-1960's or something?

 

First comment is that the US Mint seems to be going down the same road as the USPS - too many stamps coming out. I guess for stamps, you can afford them - but even in the stamp community there are plate blocks of 4, sheets, first day covers, etc. Now multiply that by the number of issues coming out and GUESS why that hobby is having problems.

Counterfeits - I don't know. Those are more pricey coins and the people who have enough money to buy them should be educated in the matter or have an intermediary who is. When they start counterfeiting 1964-D Roosy's, I'm going to start getting worried.

 

I tend to agree with Carl. The Mint is battling to remain relevant in a plastic/electronic world -- a battle they seem destined to lose. I consider the circulation coins to be lame. The commems are where the action has moved but they seem to be trying to copy the Canadian mint with larger and larger numbers of offerings. I'd like to see them try something daring like producing a coin with the old silver dollar specifications and a liberty image, new or old. The could probably make it a $50 coin and it would be wildly popular with collectors and maybe even the general public because of the silver content. And before someone posts that nobody would want a $50 face value coin with only $10 of silver in it, remember that this is about the same situation with quarters, halves and dollar coins today.