The Numismatic Bibliomania Society

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V14 2011 INDEX       E-SYLUM ARCHIVE

The E-Sylum: Volume 14, Number 28, July 10, 2011, Article 13

NUMISMATIC HEADLINE HYPE

Regarding a Time Magazine piece commenting on the case, Tom Fort writes:

Regarding this article, the last few paragraphs of advice for those collecting US coins, truer words were never spoken.

It's the kind of story, one of intrigue around the tremendous value in coins that had been sitting untouched for decades, that lures people into coins as an investment. Coin dealers like Goldine and Numis Network, which is actually a multilevel marketing outfit that deals in coins, tout the financial benefits of coin collecting.

And in a way it makes sense: What could be better than collecting money?

But here's the reality: With the exception of exceptionally rare coins in excellent condition, they have generally proven to be an unremarkable investment. And, as About.com's coin expert warns readers, the more hyped up a coin is, the worse of an investment it will tend to be. One piece of advice: Please, please, please stay away from the "modern commemorative" coins a series of "rare" coins produced by the US Mint beginning in 1982. These are made to be collector's items and so everyone who wants them buys them and keeps them in mint condition. It's unlikely that a powerful secondary market for them will ever develop (see, for instance, collectible plates).

The story of this lawsuit will likely be used by more than a few coin dealers hocking the dream of a family fortune from rare coin investment. But most of the value in coins comes from dealing them to unsophisticated buyers, not from buying them.

It's a huge stretch to state that only "exceptionally rare coins in excellent condition" can be a good investment, any I think history shows that there can be some real bargains even in modern commemoratives (Jackie Robinson $5 gold, anyone)? But Tom's focusing on the hype that gives the hobby a bad name. -Editor

To read the complete article, see: Man Fights U.S. Treasury over $80 Million in Rare Coins (moneyland.time.com/2011/07/07/man-fights-treasury-over-80-million-in-rare-coins/)

Wayne Homren, Editor

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The Numismatic Bibliomania Society is a non-profit organization promoting numismatic literature. See our web site at coinbooks.org.

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