Volume 8 Issue 5 Liberty Coin Service’s Monthly Review of Precious Metals and Numismatics May 1, 2002 U.S. Rare Coins Prices Sprint

Upward! Many Bargains Still Available—For Now! Gold Hits 26 Month Peak, May Keep Going!

Although the price of gold hit a 26 Type Coins, Key-Date Coins, U.S. 2002 Year-To-Date month high last week, the most impor- Copper Coinage, Colonial issues, and Change In Value tant developments in the past month early 20th Century Coins. December 31,2001-April 30, 2002 were some major advances in U.S. rare In many instances, quoted prices were 10-20% higher than they were a month Precious Metals coin prices and an outlook for even more Gold +10.8% appreciation in the coming months. earlier. A surprising number of coins Platinum +9.8% For the past few years, I have advised traded hands at these levels! Silver -1.1% Allan and Tom both witnessed dealers Palladium -19.9% you that supplies of desirable collector coins on the market were thin. The only buying coins at prices higher than Numismatic Coins reason that prices have been fairly stag- Trends, which is supposedly a fairly up- 1937 Buffalo Nickel, PR-66 +40.4% nant is that tight-fisted collectors have to-date guide for retail selling prices! 1936 Walking Half, PR-65 +34.3% Expensive “trophy” coins, those that 1899 Morgan Dollar, MS-64 +33.8% been cautious and patient. They were 1936 Mercury Dime, PR-65 +13.7% willing to wait for another opportunity to sell for more than a few thousand dol- acquire nice coins at today’s low prices lars, had been in the doldrums for the US Dollar vs Foreign Currencies past year. There had been some real British Pound -0.1% rather than bidding up prices by being Japan Yen -0.2% too eager. bargains available while demand was Euro -1.0% For months, our sales at national and slack. But one major wholesaler who Canada Dollar -1.5% specializes in such coins told Allan yes- Swiss Franc -2.5% local shows have been unusually strong while bargain-hunting has been espe- terday that they are again selling read- US And World Stock Indices cially difficult. Other dealers told us ily. Nikkei 225 +9.0% much the same story. They were looking Rather than selling coins for what DJ World (excluding U.S.) +2.2% Dow Jones Industrial Average -0.8% for lots of inventory for waiting custom- might have been a reasonable price a month earlier, many dealers almost London FTSE 100 -1.0% ers, but had trouble finding material. Frankfurt Xetra DAX -2.3% The time of stagnant prices appears to seem to be afraid to sell their coins too S&P 500 -6.2% be over. In the past month, several ma- cheap. They want prices today where NASDAQ -13.4% jor buyers have increased the prices they they estimate the market might get to a are willing to pay to obtain the inventory month from now. If they cannot get the past few weeks has several similarities. they want. At a major coin show in that higher price, they would prefer to It seems that we are in the early stages of Santa Clara, California in mid-April, keep them in inventory. the next great bull market in rare coins. buyers were trying to scoop up all the at- The table at the right gives you some Even though many prices are up from a tractive Classic Silver Commemoratives, idea of how much some prices have few months ago, the bulk of price increases almost no matter the price. jumped since the beginning of the year. are still in the future. LCS Chief Numismatist Allan Beegle Even these few examples are conserva- This emerging bull market in rare coins and Senior Numismatist Tom Coulson tive because they compare information has some significant and surprising differ- attended the huge Central States Numis- from published price guides, which are ences from past booms. These differences matic Society (CSNS) show in Colum- low in today’s market. provide some opportunities to get in on the bus, Ohio this past weekend. They re- In the huge bull markets of 1979-80 and 1989, we saw U.S. rare coin prices ground floor of the current boom. ported that the aggressive buying activity expanded to other areas. Better-Date U. steadily advancing almost on a weekly (Continued on page 2) S. Gold and Better-Date Morgan and basis by 5-10%. The action we saw in Peace Dollars led the way. Numismatic Portfolio Recommendations page 2 In response, dealers quoted strong Inside this issue: prices on a wide range of U.S. coins in- Philadelphia Mint Reopened April 18 page 4 No Circulating 2002 Sacagawea Dollars page 4 cluding 19th Century Nickel and Silver This Time It’s Different! neric, U.S. coins such as common-date “weak hands” buyers of the past who U.S. Gold, Mint State rolls of common- responded to well-crafted sales promo- Past rare coin market booms have often date Morgan and Peace Silver Dollars, or tions, only to often dump their hold- been driven by promoters who took advan- high-grade individual common-date ings too soon, invariably at a poor tage of other supporting factors. Morgan and Peace Dollars. As prices time. The 1979-80 boom was supported by rose for these common coins, they The boom is also different in that it high inflation and strong gold and silver tended to carry the better-date and is being led by coins that are in tight markets and strong markets in other col- scarcer type coins right along with them. supply and will never be plentiful. lectibles. Rare coin prices peaked two There has been less telemarketing of That makes it much easier for a rising months after gold and silver reached their rare coins in the past few years compared market to continue for a long time and all-time highs. to the 1980s and early 1990s. Prices for to increase more than might otherwise In the middle to late 1980s several tele- common-date U.S. Gold Coins, Mint happen. marketers promoted pre-1933 U.S. gold State Morgan and Peace Dollar rolls, and Another difference this time is that coins with the false claim that they were high-grade common-date Morgan and the boom coincides with one of the the only way to keep your privacy when Peace Dollars have been very reasonable, largest ever increases in coin collect- buying gold. After a few years, when the with many at their lowest levels in at ing interest in the U.S., spurred by the outrageous claims never came to pass, the least 15 years! States Of The Union Quarter series. promoters went on to other activities. With fewer campaigns to market such By the way, this developing boom is Prices fell dramatically. coins to the numismatically uninformed, being led by the very categories of rare The 1989 boom was fueled by the crea- there are ready supplies available on the coins that we have been recommend- tion of a handful of Wall Street funds to in- market. Instead of leading the develop- ing for the past several years. vest in rare coins. Everyone was promot- ing rare coin boom, they are now the lag- In sum, the current strength in the ing the opportunity to get into rare coins gards. rare coin market is for all the right before the “flood of Wall Street money” Today’s boom is different. It is being long-term reasons, not shaky transient pushed prices through the stratosphere. driven by collectors looking for the bet- ones. It will likely yield nice profits in When outside investor interest turned out ter values instead of coins that can be ac- the categories we have recommended to be less than expected (one $50 million quired in mass quantities. On average, in the past. fund only had $15 million subscribed, for today’s buyer is more likely to be example), the market fell. “strong hands” who will hold the coins Our Recommended Numis- Invariably, the promoters and telemar- until prices rise sharply. This is a defi- matic Portfolio keters would offer the blue chip, or ge- nite contrast to the often uninformed The purchase of rare coins is not for Today’s U.S. Numismatic Bargains Compared To Past Peak—Some Examples The last major peak in the U.S. rare coin market was almost 13 years ago, at the beginning of June 1989. Even though a number of prices are higher today than they were a few months ago, there are thousands of U.S. coins that are real bargains compared to lev- els back then. Here are some examples of coins that compare favorably in price today to June 1989. Although many of these coins represent excellent values today, remember that some price declines are partly due to factors other than the general market cycle. For instance, there may be significant increases in supply of a particular coin. Past results are no guarantee of future performance. Although numismatic coins can enjoy greater appreciation than gold and silver bullion, they are less liquid and riskier. Selling Prices U.S. Morgan Dollars Elgin MS-65 $2,075 $235 6/89 Today 1878 8TF MS-64 $1,375 $295 Hug-Walloon MS-65 $4,550 $470 U.S. Gold Type Coins 1878-S MS-65 $1,100 $220 Maryland MS-65 $2,250 $325 $1.00 Liberty MS-63 $4,800 $ 900 1879 MS-64 $ 690 $125 Rhode Island MS-65 $2,200 $215 $1.00 Indian MS-63 $3,550 $ 825 1880 MS-65 $7,750 $750 Robinson-Ark MS-65 $2,400 $315 $2.50 Liberty MS-63 $2,550 $ 690 1882 MS-64 $ 315 $ 60 1935-S San Diego MS-66 $3,150 $200

$2.50 Indian MS-63 $2,400 $ 725 1883 MS-65 $1,030 $145 Wisconsin MS-65 $1,450 $240

$5.00 Liberty MS-63 $3,550 $ 575 1884 MS-65 $1,475 $255 U.S. Type Coins And Other $5.00 Indian MS-63 $6,600 $1,000 1888 MS-65 $1,150 $195 3 Cent Nickels PR-65 $2,400 $480 $10.00 Liberty MS-63 $3,825 $ 625 1889 MS-65 $2,450 $295 3 Cent Nickels MS-65 $4,025 $600 $10.00 Indian MS-63 $3,025 $ 650 1890 MS-64 $ 850 $105 1883 NC Lib Nick MS-65 $1,825 $235 $20.00 Liberty MS-63 $1,800 $ 500 1896 MS-65 $1,225 $155 Seated Liberty Half Dime Legend MS-63 $20 St Gaudens MS-63 $ 970 $ 430 1897 MS-65 $1,875 $230 $ 650 $205 Classic U.S. Gold Commemoratives 1898 MS-65 $1,600 $200 Seated Liberty Dime Legend MS-65 1903 Louisiana Purchase-Jefferson $1.00 1900 MS-65 $1,325 $155 $5,200 $940 MS-63 $2,875 $680 1901-O MS-65 $1,425 $165 Barber Dime MS-65 $3,575 $585 1915-S Panama-Pacific $1.00 MS-63 1902-O MS-65 $1,125 $145 Standing Liberty Quarter T2 Full Head 1903 MS-65 $1,600 $200 $2,450 $500 MS-65 $3,250 $695 1916 McKinley $1.00 MS-63 U.S. Classic Silver Commemoratives 1936 T2 Buff Nick PR-66 $5,000 $2,275 $2,350 $560 Albany MS-65 $1,975 $325 1937 Buffalo Nick PR-66 $3,650 $1,650 1926 Sesquicentennial $2.50 MS-63 Bridgeport MS-65 $1,925 $215 1936 Mercury Dime PR-65$3,700 $1,700

$1,800 $575 Cleveland MS-65 $2,175 $220 1937 Walking Half PR-65 $3,925 $1,200 Delaware MS-65 $2,475 $365 1938 Walking Half PR-65(Continued $3,100 on page$925 3) (Continued from page 2) price increases are underway. Be selec- tee (GATA). everyone. Although the prospects for tive and look for opportunities. Had this lawsuit been allowed to con- appreciation are greater than for gold 5. Better-Date and Better-Grade tinue, the next stage would have been and silver bullion, there is also greater Minor Silver Coins. (10-20%) Here discovery. There, the defendants would risk. Because of this, they may be com- again, many issues are available for a have been compelled to answer ques- pletely unsuitable for your particular huge discount to their past peak prices. tions under oath that they so far have circumstances. Supplies are erratic. With care, you can made concerted efforts to avoid answer- Overall, I recommend that 5-20% of acquire coins that have not yet taken off ing. If the case had gone on to discov- your net worth be held in hard assets in price. ery, there was significant chance that such as precious metals and rare coins. 6. Silver Commemoratives, 1892- such an announcement would have led to Of your total hard asset holdings, I am 1954. (10-15%) There are an amazing a major jump in the price of gold. conservative and suggest that gold and number of low-mintage issues in this The major reason the court dismissed silver bullion-priced coins and ingots series. Prices are far too low today, but the suit was a finding that Howe did not make up 75-100% of your total. That are already on their way up. Supplies have standing to file the case. Although leaves 0-25% for rare coins. A com- of attractive white coins are almost non- Howe had been a shareholder of BIS, the fortable level for many would be 10% existent. Popularity will likely grow judge ruled this connection was not ade- of your hard assets allocated to rare more than other areas as a result of the quate to pursue the lawsuit. In discus- coins while an aggressive investor may Statehood Quarter series. sion contained in the order, the judge put as much as 25% into numismatics. 7. Copper and Nickel Coins and stated that there were several other par- We have evaluated different catego- Special Opportunities. (5-10%) ties who might have standing to pursue ries of U.S. coins and recommend a di- There are a number of low mintage rari- such a case including major gold mines versified allocation. Different catego- ties that are real bargains today. Sup- and countries where gold mining was an ries will peak and decline by different plies are erratic. Prices have not yet important economic activity. amounts and at different times. With jumped. Look for opportunities. In addition, the judge stated that the diversification, you can achieve an I have been a coin collector for almost doctrine of sovereign immunity pro- overall better return over the long-term 40 years. I am used to being patient tected several of the parties from being than by concentrating in one area. and selective in adding to my numis- sued. However, this immunity did not Here are the categories we especially matic holdings—and profiting by that extend to the private bank defendants like (using a conservative approach attitude. There would rarely be a sce- such as JP Morgan Chase, Citibank, and leaning toward greater safety and li- nario where I would advocate a faster others. quidity): numismatic acquisition program. This result was more or less to be ex- 1. Common Date U.S. Gold Coins, But now, looking at the solid base that pected. If there really is gold market $1.00 through $10.00. (15-25%) the U.S. rare coin market has estab- manipulation going on, and GATA had These will almost certainly outperform lished, how thin supplies are, and at amassed an impressive amount of re- common-date Double Eagles. These how prices have started rising with en- search plus damaging witnesses to sup- coins are still available and have not thusiasm, I don’t think that patient and port the charge, the defendants would run up in price, so they make excellent selective will maximize profits. It is pull out all the stops to prevent this case choices right now. somewhat against my nature to say it, from proceeding. Their preferred out- 2. Better-Date U.S. Gold Coins, but I think the greater rare coin profits come would be for the case to be dis- $1.00 through $20.00. (10-20%) will be realized by those make their missed on a procedural matter, having There are many issues that are 10 to 50 largest purchases soon compared to nothing to do with the merits of the case. times scarcer than common dates, yet what will be gained by those who are For all practical purposes, the case is cost surprisingly close to the price of patient and selective. almost dead. However, on April 4 the common pieces. This has been an With the stock markets in the dol- Reginald Howe filed a motion to amend area of strength, with supplies espe- drums, the U.S. dollar teetering, low in- the court’s order. He asked the court to cially tight. Seek opportunities as they terest rates on bonds and CDs, there postpone the dismissal of the suit until arise. may never be a better time to buy rare he has the opportunity to amend his suit 3. Gold Commemoratives, 1903- coins. to charge breach of fiduciary duty 1926. (10-15%). These coins are far against all the directors of BIS. He fur- scarcer than the gold coins issued for GATA Lawsuit Dismissed ther asked the court to make a declara- circulation, yet often sell for less than By Court. What Now? tion whether the US Secretary of the the more common coins. Supplies are On March 26, the U.S. District Court Treasury, through the Exchange Stabili- really tight, but prices have not yet in Massachusetts filed an order to dis- zation Fund or otherwise, or officials of caught fire. Snap them up when they miss the lawsuit that charged the Bank the Federal Reserve System have the le- can be found. for International Settlements (BIS) Fed- gal or constitutional authority to manipu- 4. Better-Date and Better-Grade eral Reserve Chair Alan Greenspan, late gold prices. Morgan and Peace Dollars. (15-25%) other central banks, private banks, and It will likely be months before the Morgan and Peace Dollars are some of several past and present government of- court issues its decision on Howe’s latest the most widely collected U.S. coins. It ficials with manipulating the price of motion. I am not optimistic that it will is possible to pick up many rarities for a gold downward. This lawsuit was filed succeed at salvaging this lawsuit. fraction of their mid-1989 prices. Sup- by Reginald Howe personally on behalf Although the judge did point out that plies are getting tight and significant of the Gold Anti-Trust Action Commit- (Continued on page 4) (Continued from page 3) be your last opportunity to acquire them at The Month other parties might pursue this lawsuit, I such reasonable prices. am doubtful that they will. Any large Gold Range $13.00 4.3% gold mining company or countries such Net Change +6.75 See Michigan State Quarter as South Africa or Ghana would risk the Silver Range .25 5.4% Designs Up Close wrath of the U.S. government as well as Net Change -.13 The proposed Michigan state quarter de- their own banks by making such a stand. Gold/Silver Ratio 68.3 signs unveiled by Governor Engler on Unless there are significant develop- Net change +3.4 April 3 will be on display next week, May ments on this suit or the subjects it cov- Platinum Range 41.00 7.8% 10-12, at the Michigan State Numismatic ered, I do not expect to cover it further. Net Change -12.00 Society Spring Convention. Any manipulation of the gold market Platinum/Gold Ratio 1.66 The Convention is being held at the Kel- that might have happened cannot stop logg Center on the Michigan State Univer- Date Gold Silver Platinum what I see as the eventual jump in the Apr 03 302.50 4.66 527.00 sity campus in East Lansing. It is open to price of gold. At best it will only delay Apr 04 301.50 4.62 525.00 the public at no charge. the increase by several years. When the Apr 05 300.00 4.57 527.00 The public will be able to vote for their next gold boom hits, it would cause it to favorite of the five designs., with the re- be more dramatic than would have hap- Apr 08 300.50 4.56 527.00 sults shared with Governor Engler. pened in the absence of manipulation. Apr 09 298.75 4.55 525.00 Apr 10 301.75 4.62 528.00 Philadelphia Mint Resumes Gold and Gold Coins Apr 11 302.25 4.58 536.00 Production April 18 Gold closed today at $309.25, up Apr 12 302.25 4.58 534.00 After being closed for OSHA violations $6.75 (2.2%) from last month. since March 4, the Philadelphia Mint re- Apr 15 300.00 4.45 531.00 Last Friday, gold closed at $311.50, sumed production of coins for circulation its highest close since it closed at Apr 16 298.50 4.41 535.00 Apr 17 302.00 4.44 544.00 on April 18. $315.00 on February 10, 2000. Apr 18 304.00 4.49 556.00 Had it lasted much longer, the shutdown I believe that the average gold price Apr 19 302.00 4.50 551.00 might have made the Ohio state quarters for the month of April is the highest for from the Philadelphia mint significant rari- any month going back to at least 1999. Apr 22 303.00 4.53 546.00 ties. Although supplies are still almost This growing strength is a response to Apr 23 304.00 4.56 545.00 non-existent, the Mint announced that they all the fears of shaky paper asset values. Apr 24 304.25 4.56 550.00 expect to produce about the same number Apr 25 308.00 4.61 551.00 Among the newest scares were AOL of Ohio quarters at Philadelphia as they Time Warner’s loss of more than $50 Apr 26 311.50 4.64 548.00 strike in Denver. billion in the 1st quarter and Enron re- Apr 29 310.75 4.64 539.00 Mint Will Not Strike 2002 Sa- porting that it would lose at least $14 Apr 30 309.00 4.53 534.00 billion in assets (about 25% of all its re- May 01 309.25 4.53 515.00 cagawea Dollars For General ported assets) by having to value its de- London Silver Market Premium To New Circulation rivatives at market value. York Silver Market = 2¢ In April, the U.S. Mint announced that Demand for physical and paper gold demand for Sacagawea Dollars for circula- Gold, silver and platinum quotes are work- continues to be strongest from relatively tion has almost completely dried up. As a new buyers such as mutual funds and ing spots at 2:45 EST/EDT each day, quoted in U.S. dollars per troy ounce. result, none will be struck for circulation in trading houses looking for safety. It has 2002. had little impact on physical gold premi- before the recent market surge. When The failure of this coin was predictable. ums. these are gone, we are unsure when we It is almost certainly due to the continued The U.S. American Arts Medallion might find other equally attractive opportu- production of paper $1.00 notes by the (2.4%), and Austria 100 Corona nities. See the enclosed flyer for details. government. Other nations that have come (2.5%) are still the lowest premium gold Silver and Silver Coins out with such coins succeeded partly be- issues with the South Africa Kruger- cause they withdrew the corresponding rand (2.7%) close behind.. Silver settled today at $4.53, down 13 cents (2.8%) from four weeks ago. notes from circulation. The British Sovereign (6.1%) is our The Denver and Philadelphia Mints will favorite smaller gold coin. Other lower U.S. 90% Silver Coin (7.9%) is our top recommendation for physical silver. U.S. strike modest quantities of uncirculated premium small gold coins include the coins to be included in Mint Sets and to be U.S. 1/2 Oz Gold American Eagle 40% Silver Coin (4.4%) is worth consid- ering for its price advantage. The higher sold in bulk to collectors at premium (6.9%), French 20 Franc Rooster prices. (7.4%) and Swiss 20 Franc (7.4%) and premiums for 100, 10, and 1 Ounce In- U.S. 1/4 oz Gold American Eagle gots (11.0-13.2%) make them less attrac- (7.7%). tive at the moment. We managed to acquire the Better- The Better-Date U.S. Morgan Dollars Date U.S. Gold $20.00 Double Eagles in our enclosed offering were acquired be- fore the recent jump in prices. This may Liberty’s Outlook is published monthly by Liberty Coin Service, 300 Frandor Ave., Lansing, MI 48912. Telephone: National 800/527-2375 Fax: 517/351-3466 Internet: www.libertycoinservice.com, E-mail: [email protected] Patrick A. Heller, Editor. Subscriptions $79.00 per year (12 issues). Send subscription orders and changes of address to the above address. All information is derived from sources believed to be reliable, but accuracy cannot be guaranteed. No guarantee of profitability of any investment or recommendation contained herein is made or implied. Liberty Coin Service has been a dealer in rare coins and precious metals since 1971. The publisher, its principals and associates may, from time to time, have a position in items recommended here. Copyright 2002, all rights reserved.