Is coin counterfeiting that rampant?

What is better than a Top Tier Third Party Grader? How about the Smithsonian? And how about the fakes in their collection which caused them to shut it down and threaten to do so forever? And some of those fakes were listed in the Red Book. And none of them came from China.

 

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the more I read the more wary I am of buying coins. If the only real safe bet is buying a slabbed coin, then the TPG are ruling the coin market. Also remember that there are plenty of fake slabs . Where does this leave a collector?

As a long time collector of coins I am not an expert on die characteristics etc. If this is what it takes to keeps from being taken then I would suggest that about 99% of collectors are at risk.

I'm starting to think that ordering from the mint is the only safe option, but it sures rules out the vast majority of coins.

Interestingly, I was going through one of my 2 circulated Walking Liberty sets that were put together in the late 70's and I have a suspicion that one of the keys dates is a fake. Cant remember which one it was. This coin was purchased at a state coin show from a so-called reputeable dealer. This is where I finished out buying the few keys I needed to finish the sets.

Lack

 

Education is key. If you educate yourself on characteristics of counterfeit and genuine coins you increase your odds of not being fooled by common counterfeit coins.

 

Thank you Hobo

 

How can the fakes be so good as to match weight and diameter and not be too expensive to make?

 

As long as they can sell the coin for more than the cost of making it (planchet cost plus cost of making dies, etc.) there is a profit to be made. There is more profit to be made on coins with a high numismatic value. And profit is the reason counterfeiters make coins.

 

I heard years ago that the Iranian government was out to counterfeit so much U.S. currency to weaken our monetary system
very badly. But they never succeeded, our own government did us more damage than they ever could have accomplished.
Is this true?

 

Yes it is true. You have probably heard of the $100 Supernote counterfeits being made in North Korea. They originally started out coming from Iran. Shortly before the fall of the Shah of Iran in 1978 we sold Iran a state of the art intaglio printing press. The exact same model of press that we were using at the BEP to print our currency. Sortly after the fall they began using the press to create extremely high quality counterfeit hundreds. I don't know why they stopped but they did and then sold the press to North Korea and they started printing the supernotes.

And yes out own government has done more damage.

 

I only have junk stuff, but I have some junk fakes that I know by research. So if I have them without spending much on my collection, I agree that nearly everyone has come into one. My favorite is a fake five dollar gold piece made from a V nickle. My gold plated fake is a counterfeit. LOL So there are even fake counterfeit coins out there.


















v

 

What you have is probably a fake Racketeer Nickel. "Genuine" Racketeer Nickels were made by gold plating 1883 "No Cents" Liberty Nickels and were passed off as $5 gold pieces. The Liberty Nickels was introduced in 1883 so many people were unfamiliar with it when it first came out. The first version only had a 'V' on the reverse to denote 'FIVE' but did not clarify that it was 'FIVE CENTS' and not 'FIVE DOLLARS'. The nickel had a diameter close to the $5 coins so a few unscrupulous folks gold plated the nickel and passed them off as a $5 gold piece for a profit of almost $4.95.

Now unscrupulous people are making fake Racketeer Nickels by gold plating 1883 'No Cent' Liberty Nickels. If the nickel has gold plating over very worn areas you can be sure it is not a genuine Racketter Nickels because the genuine Racketter Nickels were plated before the coins had a chance to circulate much. The scam quickly came to light and the reverse of the nickel was redesigned by adding 'CENTS'.

 

Even if they were only dealing in bullion -- as all coins historically were -- coins, as weighed, measured, uniform and trusted bullion have utility over raw metal. At one time before coins, all metal was weighed and even into the 19th and 20th centuries, there were places (Thailand, among many) where it was customary for everyone to carry little scales with them to the marketplace. So, you can see where even as mere bullion it is profitable to mint coins.

However, if you read the history of the 1800s and now our times, you learn that as the price of silver fell and collapsed, governments turned to it as cheap inflationary money, nominally "backed in gold" but an expansion of the money supply, i.e., credit to the state. Now, of course, will all coins being base metal, it costs like 3 cents to make a 25-cent quarter dollar and maybe 6 cents to make a Presidential or Sacagawea dollar. Paper is even cheaper. And in the electronic age, they do not even need paper. From the Treasury to Federal Reserve and back is what? a couple of menu item clicks?

More to the point, the Chinese counterfeits -- all such fake collectibles, from paintings to car parts -- are sold into markets that support the price of manufacturing, from raw materials to shipping.

And the cost of living in China is way less than here. The average American worker makes about $100 a day, about $35,000 per year. In the PRC, it is between $6500 and $7000 -- average: half make less. (See Wikipedia table here.) It is why these coins do not come from Luxembourg and Liechtenstein.

 

I would also say that respect for the legal system is different from those countries compared to China as well. China has an extremely long history of faking coins. It has been a bane to Chinese commerce forever. It seems the cultural morality towards forgery is different than in the west.

Before anyone brings up political correctness, my wife is Asian and what I am saying isn't meant as a slur but rather a comment on cultural mores.

 

Even that is not good enough, unfortunately. The Chinese have beeen flooding the market in recent years with fake slabs, too - especially PCGS. And they are VERY difficult to detect - the have the little holographic labels down pat and everything. As the Chinese have gotten better and better - and the Chinese have been masters at copying things for hundreds of years - I understand that it has even been getting hard for PCGS to detect fake slabs. Which I think is one reason PCGS changed their slab. I suspect they also have put some unpublsihed anti-forgery elements into the new slabs so at least they can tell their own slabs from the fakes.

 

When did they change their slab? Other than the insert that lets you see the edge on the President dollars I don't believe they have made a significant change since late 2005, and the fake PCGS slabs didn't appear until early 2008. Those early fake PCGS slabs were easy to spot, the more recent fakes are more difficult but those are less than a year old.

 

Thanks For Posting

Thanks everyone for posting its a critical subject that is very interesting.
Everyone please keep offering their opinion. This is a great thread. Also one of the dealers I visit has a album with fake morgans because there is a type of collectors that only collect fakes. Go figure.

Thanks,
Steve

 

It seems like the Chinese are pretty good at counterfeiting just about everything. They are so good that even the experts have a hard time telling the difference. Do the Chinese make these counterfeits to fool the general population they are real, or are they considered by them to be reproductions, but without the strict guidelines that other countries have? If they are considered counterfeits that are made to fool people, does the Chinese government encourage it?

 

Preparing for the talk I gave at the Pittsburgh 2004 ANA convention on "Fakes, Frauds and Phonies: Threat or Menace?" I interviewed a federal agent who told me that China beheaded three men for counterfeiting US Federal Reserve Notes. I took that to mean that the US government requested perhaps not the execution but some attention to that particular problem. Obviously, however, they do not behead people for all fakes. It is an important livelihood for the population. Now, of course, ten years later, the Chinese government holds a trillion dollars or more of US government debt, so it is hard to say who pressures whom to do what.

Remember Red Dawn with Patrick Swayze? There is a new one coming out: the Chinese are only here to help.