September, 2005  Page 1 Page 2 Page 3 Page 4 Newsletter IndexHome

(Continued from page 1)

cost of Hurricane Katrina will necessitate tax and/or deficit increases, inflating the cost of everything.  After initial relief efforts conclude, and the slowdown from destroyed infrastructure and trade is absorbed, immense spending—probably $100-150  billion dollars for rebuilding will create more pressure on an already cooking economy. The Fed will have to walk a thin tightrope between strangling housing market and choking off inflation.  If they can.

      Expect these conditions to intensify into next year and long after.  While the Fed will probably nudge rates upward, the lengths to which they can use that strategy to control inflation will be limited. Pile a cautious Fed, leveling home prices, a lack


Pattern Coin Update

Rare Coins and the Economy (cont’d)

Customized Numismatic Portfolios

Text Box: What is the actual gold content of US minted gold coins?

Coin	  Gold Weight

$1	      0.05 oz
$ 2.5	      0.12 oz
$ 3	      0.15 oz
$ 5	      0.24 oz
$10            0.48 oz
$20	      0.97 oz
$5 Eagle    0.10 oz
$10 Eagle  0.25 oz
$25 Eagle  0.50 oz
$50 Eagle  1.00 oz

luster stock market and mediocre interest rates on top of a five year rare bull market in rare coins fueled by federal advertising dollars and a rapidly expanding collector base, and  you  create what we probably have is a perfect storm for new investment dollars to flow into collectibles. Watch for investors to go for the gold.

      Collectors would be wise to purchase undervalued rare date gold before mass marketers expose it to investors.

      Just when I thought there was nothing new to report about the Pattern Coin market, Whitman Publishing announces that it will publish an updated version of the Judd Book of Patterns.

      As you may remember, when the 2003 version of this book was published, not only did the first printing sell out within a month, but the pattern market received a boost as price, rarity and historical information became readily available to the numismatic community for the first time.  Since most pattern prices have risen since that 2003 publication, the publication of this updated version is likely to spur additional interest and demand for pattern coins.  As a result, expect more price increases.

Government Coin Promotions

      The United States Mint is having a huge effect on the coin market.  As has been mentioned several times in previous issues, the state quarter program has revitalized the numismatic collecting hobby, and increased the number of coin collectors to what Coin World estimates at over 150 million people.

      Part of the reason for this success lies with the huge expenditure the Mint makes in selling and advertising their product.  According to the website, almost $46 million dollars was spent on marketing and selling coins in calendar year 2004.  Much of this is spent in television and print advertisements of mint and proof sets, state

quarters, special commemorative issues, and gold, silver and platinum eagles.

      Along with promoting the item, Mint advertisements promote coin collecting as a hobby.

      This is not surprising. According to the Annual Report of the mint, some 665 million—well over half a billion dollars— was transferred to the US Treasury as a result of sales of state quarters, mint and proof sets and other items in 2004.

      The success of this program has led the government to consider additional commemorative programs.

      The House of Representatives recently passed a bill that would create new silver dollars featuring the Presidents of the United States.  They would mint

four per year for approximately eleven years.  Along with each Presidential dollar, the mint would create a $5 gold coin featuring the corresponding first lady.  In my estimation this will be an extremely popular program.

      If the Senate passes this legislation, and the President signs it—both extremely likely in my estimation—this would be the first time first ladies have been features on United States Coins.

      Based on the excitement these issues would create, and the new collectors it spawns, as well as the very healthy profit to the United States Treasury, we can probably expect US Mint promotion of the numismatic hobby to continue, grow and intensify.  I never expected coin dealers to get a government subsidy. But here it is.  Wow!