The Coin Analyst: Memo to the Mint: End the News Blackout and Other Recommendations
by Louis Golino for CoinWeek
The U.S. Mint normally publishes a schedule of upcoming products on its web site (www.usmint.gov) that lists the majority of the year’s numismatic coins many months in advance of their release. But right now there are just three products listed on the Mint’s schedule, and none of them has a date.
The first 2012 First Spouse gold coin for Alice Paul, a suffragist, is supposed to be issued in March, but no information has been made available.
The only release date I know of is that the Star-Spangled Banner coins are expected to be released starting on March 5. This was indicated in the February 9 Federal Register notice about pricing information for those coins and the Infantry silver dollars.
The Mint had planned to release the first 2012 presidential dollars, the Chester Arthur coins, on February 16, but for unexplained reasons, that did not happen, and no new date has been given yet.
Late last year Treasury department officials stated that presidential coins will now only be issued in limited quantities for collectors in an effort to save money.
But as I explained last year that action is actually likely to cost, not save money, because the cost to produce and store dollar coins is much less than the hundreds of millions of dollars the coins generate in seigniorage. Last year the Mint earned $527 million in seigniorage, according to its 2011 annual report.
The presidential coins will now only be sold by the Mint to collectors at a premium. In 2007 when the first issue, the George Washington coin, came out almost 341 million were made, but the Chester Arthur coin’s mintage is expected to be about 1% of that. That will eliminate much of the Mint’s income from seigniorage, which funds coin production and helps reduce the deficit.
The news blackout at the Mint is leading to rampant speculation about what is going on at the Mint. Some people think a personnel shake-up could be brewing. Others wonder if the Mint is in the process of making major changes to its product line-up such as ending the numismatic versions of the America the Beautiful five-ounce silver coins.
However, Numismatic News and other publications have reported that the collector “P” versions will continue to be issued this year. By law only the bullion coins have to be issued.
Moreover, information on sales of the bullion versions of these coins has also not been made public. One Authorized Purchaser, APMEX , has listed the first release, the El Yunque coin, on its web site but with no release date.
Special, limited edition sets of American silver eagles are expected to be issued later this year. In part this is an effort to placate disappointed customers who failed to get an order in for a 25th anniversary silver eagle set.
In addition, the planned upgrade of the Mint’s ordering system was supposed to be implemented this year by a UK company that was awarded a multi-year contract by the Mint. That upgrade has been in the works for several years now, and was initially planned for this spring, but according to a recent account in Coin World, it is now expected for late this year or early 2013.
In the meantime, when limited edition sets that are very popular are released, Mint officials have indicated (as reported in Coin World), that a lottery system is possible. I know many collectors will be even more angry about a lottery system than they are about the current online and telephone ordering system.
I would like to commend the Mint’s management for some recent improvements. Quality control appears to have improved substantially in recent months; products are shipping much faster than they used to from the time an order is placed; and several upcoming issues have excellent designs such as the 2012 Native American dollar, the upcoming Star-Spangled Banner silver dollars, and this year’s America the Beautiful coins.
In terms of how I think the Mint can better manage its operations and its relations with the numismatic community, I offer the following eight suggestions
1.) The Mint should use surveys and other outreach to collectors, and perhaps hire a coin market analyst and numismatist, to better estimate demand for its products. Maximum authorized mintage levels, which are set by Congress in consultation with the Mint, have been consistently too high for years.
It seems like either too many coins are issued, or too few, to meet actual demand, whether for circulating or collector coins. Foreign mints generally have a better track record of projecting how many coins should be minted, and some sell out of collectible products within hours. With the exception of a few special issues, our Mint rarely achieves those kind of results, and coins linger around for months and months or longer.
2.) Household limits should be reexamined. They tend to be too high to be meaningful, particularly since dealers and others can easily get around them by having employees, friends, and family members place orders on their behalf.
3.) The Mint should advertise and distribute its products more widely. The America the Beautiful silver bullion series was designed as an alternative to American silver eagles, but I have never met a non-collector who has heard of them. When they see them, they are impressed and intrigued. The bullion coins will never be successful unless they reach a broader market. The quarter versions of these coins are so poorly distributed that few non-collectors seem to know about them either.
4.) I know the Mint’s public affairs staff does its best, but it is very difficult as a numismatic journalist to obtain information from the Mint apart from press releases and sales reports. I would suggest as stronger effort at outreach to the coin media, which would help the Mint get its story out.
5.) Bring back fractional burnished and proof American eagles made of gold and platinum. I know this one is not terribly likely since the Mint decided in 2008 to discontinue these products. But they would be very popular with collectors, and issuing such coins only in one ounce sizes is unfair to average collectors, who can’t afford ounces of gold and platinum, especially at current metal prices.
6.) The quality and artistic level of U.S. coinage has been uneven in recent years. Changing reverses, if not overdone, can be useful devices, but too many coins with less than compelling designs have been issued in the past couple of years. Examples include the new Infantry dollars, a number of the First Spouse gold coins, the presidential dollars, and others.
The Mint recently announced the establishment of a new design working group that should help. I know that coin collectors would be delighted by the use of more classic images of Liberty, and not just on numismatic releases, but on circulating coins and bullion too. Doing so would also promote greater interest in coins among the general populace.
7.) Many critics say the Mint is becoming too much like the Canadian and other world mints that issue many different collectible coins. That may or may not be the case depending on what one considers the right amount of coins, but what bothers me more is that there are just too many different versions of the same coin.
Rather than release multiple products with the same dollar coins or quarters in different types of packaging, I would like to see the Mint and the Federal Reserve do a better job of distributing new circulating coins through banks. That way average collectors and children could build sets from change, coins would not pile up in banks, and require the building of new storage facilities, as has happened with the dollar coins.
8.) Finally, the balance between meeting the needs of collectors, investors, distributors, and dealers should be adjusted. It is not easy to serve the interests of each constituency, but collectors and investors feel they deserve more respect from the Mint. It is ultimately in the Mint’s own interest that it ensure that its products are distributed as widely and as cost effectively as possible by implementing the recommendations in this article.
Louis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.