My thoughts on the Kennedy gold coin fiasco

[19Lyds]

Milk cows following the bell.

Exactly. They're just arguing over which bell the cow should wear to best attract followers.

[RWB]

"Anything else will be circumvented and abused by collectors, coin dealers and TPG's."

 

Yep.

[Stephon-migration]

I also think coin show releases are a good idea and help to create greater interest into this hobby, as long as it is done right.

 

Speaking of coin show releases being done right, a system like a lottery system where people who pre-register for the ANA show get to participate in a lottery to get a spot on line to buy the Kennedy gold coin or any of those big coin show releases wouldn't be a terrible idea.

 

A lottery? That is a terrible idea! Why can't the collectors who want these coins get to buy these coins? Why should "the winners" only this opportunities?

 

I had thought about the same thing that Stephon speaks of, and while it has some potential limitations, it is the only effective way that I can see to limit a handful of greedy (in my opinion) dealers from paying actors to stay in line as their buying agents. Even if dealers tried to add additional entries, it would make it less effective and more cost prohibitive.

 

The way I had it thought out would be that there would be a limit of 1 entry per person with the results being announced prior to the show or other form of over the counter release and tickets to buy the coin sent to the winners prior to the show or other form of over the counter release.

 

This would be a great way to cut down on the really long lines seen all over and the mob scene seen all over TV and this would be a great way to cut down on dealers hiring actors and having them create scenes for their own gain or to make a name for themselves. I know that I am not the only person who saw the acts by some dealers during the Kennedy gold con release as despicable.

[Stephon-migration]

Some folks just do not get it.

 

The US Mint should NOT be RELEASING ANY Coins at a Coin show and instead should readopt their old policy of No Over the Counter Sales until the Household Limits have Been Lifted".

 

Anything else will be circumvented and abused by collectors, coin dealers and TPG's.

 

I see where you are coming from. But these kinds of releases do cause greater interest, excitement, and attention to the coins that are being released and does cause additional interest in the show where the coin is being released. I think that the system needs to be reformed where this excitement, attention, and interest is channeled appropriately. I think that part of the problem with the Kennedy gold coin fiasco is that the excitement, attention, and interest wasn't channeled appropriately.

 

How could you abuse a lottery if it is set up where there is only 1 entry per person? I think that if dealers try to abuse such a system, this would end up costing them a lot of money.

[Conder101]

Even if dealers tried to add additional entries, it would make it less effective and more cost prohibitive.

Not really. For this release they had to pay for show credentials for each person they had standing in line. So if they had to pay for show credentials for each person whose name was entered into the lottery wouldn't be that different. And if they announced the winners before the show began as suggested earlier then the dealer only has to pay to bring along those few winners instead of paying hundreds of people to stand in line. It would actually be CHEAPER for the big dealers to game the system.

 

And they will still be there at the mint booth and the TPG booths buying up as many of the coins as they can from the people who aren't on their payroll. In the end the major dealers will STILL end up with the lions share of the coins.

 

The US Mint should NOT be RELEASING ANY Coins at a Coin show and instead should readopt their old policy of No Over the Counter Sales until the Household Limits have Been Lifted".

I've seen that stated several times but as far as I know they have never had any such "policy". Until recently they had just not adjusted their release dates to coincide with the large coin shows. I don't get to the large shows but other than the ANA shows how long has the Mint even had a booth at the major shows? they have been at the ANA for at least 21 years but how long for the other big shows?

[19Lyds]

Some folks just do not get it.

 

The US Mint should NOT be RELEASING ANY Coins at a Coin show and instead should readopt their old policy of No Over the Counter Sales until the Household Limits have Been Lifted".

 

Anything else will be circumvented and abused by collectors, coin dealers and TPG's.

 

I see where you are coming from. But these kinds of releases do cause greater interest, excitement, and attention to the coins that are being released and does cause additional interest in the show where the coin is being released. I think that the system needs to be reformed where this excitement, attention, and interest is channeled appropriately. I think that part of the problem with the Kennedy gold coin fiasco is that the excitement, attention, and interest wasn't channeled appropriately.

 

How could you abuse a lottery if it is set up where there is only 1 entry per person? I think that if dealers try to abuse such a system, this would end up costing them a lot of money.

No. It does not create excitement "about the coin".

 

It creates a fever "over the Label".

 

You're just not getting it and with all the work arounds and fixes you're proposing, your just supporting the continued control of the hobby by the TPG's.

 

NO over the Counter Sales until the Household Ordering Limits have been Lifted.

 

That eliminates the lines AND eliminates the depreciation value of the Slab Label after the dust settles!

 

Do you suppose that "Mr. or Ms. $100,000" will ever see $95,000 of the dollars spent on the coin (provided its true) ever again?

 

It's like this which will kill the market since the folks who know better, don't buy this stuff. Its the folks who DON'T know any better that do buy it in their quests for short to long term coin investments.

 

 

 

[19Lyds]

The US Mint should NOT be RELEASING ANY Coins at a Coin show and instead should readopt their old policy of No Over the Counter Sales until the Household Limits have Been Lifted".

I've seen that stated several times but as far as I know they have never had any such "policy". Until recently they had just not adjusted their release dates to coincide with the large coin shows. I don't get to the large shows but other than the ANA shows how long has the Mint even had a booth at the major shows? they have been at the ANA for at least 21 years but how long for the other big shows?

I do not believe that this is true Conder.

 

 

 

 

 

[Stephon-migration]

Some folks just do not get it.

 

The US Mint should NOT be RELEASING ANY Coins at a Coin show and instead should readopt their old policy of No Over the Counter Sales until the Household Limits have Been Lifted".

 

Anything else will be circumvented and abused by collectors, coin dealers and TPG's.

 

I see where you are coming from. But these kinds of releases do cause greater interest, excitement, and attention to the coins that are being released and does cause additional interest in the show where the coin is being released. I think that the system needs to be reformed where this excitement, attention, and interest is channeled appropriately. I think that part of the problem with the Kennedy gold coin fiasco is that the excitement, attention, and interest wasn't channeled appropriately.

 

How could you abuse a lottery if it is set up where there is only 1 entry per person? I think that if dealers try to abuse such a system, this would end up costing them a lot of money.

No. It does not create excitement "about the coin".

 

It creates a fever "over the Label".

 

You're just not getting it and with all the work arounds and fixes you're proposing, your just supporting the continued control of the hobby by the TPG's.

 

NO over the Counter Sales until the Household Ordering Limits have been Lifted.

 

That eliminates the lines AND eliminates the depreciation value of the Slab Label after the dust settles!

 

Do you suppose that "Mr. or Ms. $100,000" will ever see $95,000 of the dollars spent on the coin (provided its true) ever again?

 

It's like this which will kill the market since the folks who know better, don't buy this stuff. Its the folks who DON'T know any better that do buy it in their quests for short to long term coin investments.

 

 

 

In my opinion, these kinds of labels don't mean too much and I wouldn't buy a coin and pay more than the coin's worth because it has a first strike label or an ANA show label.

 

What exactly do you mean when you say control over the hobby by TPG's. TPG's are very useful to me and countless others in this hobby and I think that we are all better off having them than not having them. Plus, we are on a TPG owned forum too.

[jpcienkus]

I agree with LYDS on this one. Eliminate initial coin releases at large coins shows (any coin shows for that matter) and this problem would be minimized.

 

If the U.S. Mint opened the online ordering at least 2 weeks prior to physically bringing the new release to one of the big shows, that would still provide "buzz" around the new release. It would also ensure that people who couldn't attend the show could get coins in a reasonable amount of time to get the "ER" or "FS" label they desire from the TPG. If someone wanted a show specific label, then they would either need to attend the show or pay the premium if buying online from one of the collectors/flippers/dealers who attended the show.

 

IMO, a lottery system would just make the situation worse. It is not fair to all and that is what I thought we are trying to achieve: fairness.

 

Personally, I don't understand the ER/FS/Show specific craze for the label. Just because I don't understand it, doesn't mean there isn't a market for them. I have personally paid extra for a label. I paid more money for some of the Newman Collection coins I won at HA than if they didn't have that pedigree. A little different reason for the label, but a label none the less.

 

Enterprising people will always find ways to exploit markets. Dealers have a right to make money. While I don't appreciate the business tactics of some in the pursuit of profit, I don't begrudge there right to make money in the hobby. The only way I can show my displeasure with their practices is to not purchase from them.

 

Edited to add my thoughts on the suggested lottery system.

[19Lyds]

Some folks just do not get it.

 

The US Mint should NOT be RELEASING ANY Coins at a Coin show and instead should readopt their old policy of No Over the Counter Sales until the Household Limits have Been Lifted".

 

Anything else will be circumvented and abused by collectors, coin dealers and TPG's.

 

I see where you are coming from. But these kinds of releases do cause greater interest, excitement, and attention to the coins that are being released and does cause additional interest in the show where the coin is being released. I think that the system needs to be reformed where this excitement, attention, and interest is channeled appropriately. I think that part of the problem with the Kennedy gold coin fiasco is that the excitement, attention, and interest wasn't channeled appropriately.

 

How could you abuse a lottery if it is set up where there is only 1 entry per person? I think that if dealers try to abuse such a system, this would end up costing them a lot of money.

No. It does not create excitement "about the coin".

 

It creates a fever "over the Label".

 

You're just not getting it and with all the work arounds and fixes you're proposing, your just supporting the continued control of the hobby by the TPG's.

 

NO over the Counter Sales until the Household Ordering Limits have been Lifted.

 

That eliminates the lines AND eliminates the depreciation value of the Slab Label after the dust settles!

 

Do you suppose that "Mr. or Ms. $100,000" will ever see $95,000 of the dollars spent on the coin (provided its true) ever again?

 

It's like this which will kill the market since the folks who know better, don't buy this stuff. Its the folks who DON'T know any better that do buy it in their quests for short to long term coin investments.

 

 

 

In my opinion, these kinds of labels don't mean too much and I wouldn't buy a coin and pay more than the coin's worth because it has a first strike label or an ANA show label.

 

What exactly do you mean when you say control over the hobby by TPG's. TPG's are very useful to me and countless others in this hobby and I think that we are all better off having them than not having them. Plus, we are on a TPG owned forum too.

Be careful Stephon, you might choke while guzzling that Kool-Aide!

 

TPG's DO provide an excellent, professional opinion on a coins grade BUT, in the interest of marketing and generating MORE Revenue (for the TPG), the TPG's have expanded into the "label" business which concentrates NOT on the coin in any way, but HOW, WHEN, and WHERE that coin was submitted.

 

This is not coin collecting and its NOT good for the coin collecting hobby.

This is SLAB/LABEL Collecting which, IMO, is a dead end street.

 

Perhaps you were not around for all the First Strike™ discussions but many long time numismatists felt that the label was deceiving. AND many buyers of those labels, "actually believed" and as far as I know, "STILL BELIEVE" that the coins are the first off the presses and as such, of higher quality.

 

I cannot help but think that there are folks out there that "ACTUALLY" believe that a PF70DCAM Gold Kennedy in an ANA Labeled Slab is truly of higher quality than a PF70DCAM Gold Kennedy in a generic slab.

 

Over the long run, this cannot be good although it has been a boon in sales and money to coin dealers which subscribe to submitting these coins for these specific labels.

 

TPG's can do whatever they want but collectors NED to know what it is they are buying. NGC used to have a First Strike™ Slab Label but that was changed to the more appropriate "Early Release" label.

 

Neither label is an indicator of when the coin was minted, only that it made it to market before the other little piggies.

[Afterword]

Personally, I collect the coins - raw or in a slab. If other collectors want to collect slabbed coins with particular labels, I do not have a problem with them doing so.

 

 

 

 

[BillJones]

Personally, I collect the coins - raw or in a slab. If other collectors want to collect slabbed coins with particular labels, I do not have a problem with them doing so.

 

 

 

 

I also don't care if the collectors want to collect these things with labels. I just get tired of the dealers who play games with them by trying to corner markets and charge high prices as a result. With the Kennedy coins I think that there will be a melt down, and some of these people are paying high prices now will regret it in the future.

 

Frankly I don't want these coins in slabs period.

[Afterword]

"I just get tired of the dealers who play games with them by trying to corner markets and charge high prices as a result. With the Kennedy coins I think that there will be a melt down, and some of these people are paying high prices now will regret it in the future."

 

 

 

 

What is there to do? Reforming capitalism would be quite a daunting undertaking.

 

[Walkerfan]

With the Kennedy coins I think that there will be a melt down, and some of these people are paying high prices now will regret it in the future.

 

I agree. All I can say is that the FOOLS will learn the HARD way. They have been warned and all the info is out there. But who knows---maybe they will do OK and we will be wrong and look bad in the process?? There are still a lot of Kennedy admirers out there (including myself) and that may just be enough to increase the fuel to the market. I don't know.....what I DO know is that I, personally, would NOT want to take that kind of risk with these coins and it is VERY speculative if nothing else IMHO.

[Stephon-migration]

With the Kennedy coins I think that there will be a melt down, and some of these people are paying high prices now will regret it in the future.

 

I agree. All I can say is that the FOOLS will learn the HARD way. They have been warned and all the info is out there. But who knows---maybe they will do OK and we will be wrong and look bad in the process?? There are still a lot of Kennedy admirers out there (including myself) and that may just be enough to increase the fuel to the market. I don't know.....what I DO know is that I, personally, would NOT want to take that kind of risk with these coins and it is VERY speculative if nothing else IMHO.

 

I doubt we will be wrong. At least with the 2009 UHR, it was a remake of an extremely popular coin which is regarded as one of the most beautiful US coins ever minted. This 50th anniversary Kennedy just screams greed on the part of the US Mint and on speculators.

[19Lyds]

"I just get tired of the dealers who play games with them by trying to corner markets and charge high prices as a result. With the Kennedy coins I think that there will be a melt down, and some of these people are paying high prices now will regret it in the future."

 

 

 

 

What is there to do? Reforming capitalism would be quite a daunting undertaking.

True.

 

How about if/when the average price drops well below that $100,000 mark, we all just post "Whew! I'm glad I didn't buy that one!!"

 

 

 

 

 

 

I'll start.

 

"WHEW! I am glad I didn't buy THAT ONE!"

[Afterword]

"I just get tired of the dealers who play games with them by trying to corner markets and charge high prices as a result. With the Kennedy coins I think that there will be a melt down, and some of these people are paying high prices now will regret it in the future."

 

 

 

 

What is there to do? Reforming capitalism would be quite a daunting undertaking.

True.

 

How about if/when the average price drops well below that $100,000 mark, we all just post "Whew! I'm glad I didn't buy that one!!"

 

 

 

 

 

 

I'll start.

 

"WHEW! I am glad I didn't buy THAT ONE!"

 

 

 

 

If you had a name and address, you could send a sympathy card. They say Hallmark has a card for every occasion.

[GoldFinger1969]

"The Mint is very proud to have produced over 40,000 of these beautiful coins," said Deputy Director Peterson. "We will continue to produce 6,000 of the coins per week for the next several weeks and continue to assess demand. We are committed to maximizing access to these products," Peterson said.

 

They should produce 30,000 or more a week and FLOOD the market and burn the speculators and other insufficiently_thoughtful_persons who paid 300-700% premiums for the coin.

 

It's the only way to teach these people a lesson.

[GoldFinger1969]

The more I think of it, the more I think the only way to curb this nonsense with the multitude of gold coins being offered is to have the mint standardize and trim their gold coin offerings so there are only 2 main gold coin options from the US Mint. These would be the commemorative gold coins which Congress authorizes (which already have restrictions on it because of past abuse), and a 24k St. Gaudens Ultra High Relief gold coin which would be 34mm in diameter which would be made for both collectors and investors annually. This should be done because the mint shouldn't be putting out way too many gold products, as they are more expensive, and the mint shouldn't be out to bankrupt people with all of the diverse offerings in gold. The US Mint has been putting out way too many product ideas, especially when it comes to gold coins.

 

I agree with your general thrust, but the 2009 UHR was 27 mm, why are you going back to the 34 mm version that wasn't used back in 1907 ?

[GoldFinger1969]

TPG's aren't going away and neither are their gimmicks for already-out-there coins.

 

But the Mint can stop this insanity with the Kennedy Golds by simply making more of the product. It ultimately boils down to SUPPLY and DEMAND. Flood the damn market with more of the coins until the premium goes down to bullion value.

 

It's the only way.

[World Colonial]

I believe you will get your wish. What is the current mintage at this time? Over 50,000? How many will be made? 75,000? More?

 

Longer term, I don't believe there are anywhere near this number who BOTH want it AND are willing to pay a substantial premium to the issue price. I admit it is a novelty, there is the nostalgia factor and it fits into numerous potential sets. At the same time, the final mintage will hardly be low and it certainly isn't cheap even at a nominal premium to bullion which I believe is reflected in the issue price.

 

I make the last comment because while I believe some non-collectors will buy it and many more potentially are interested in it, I don't see them buying it in large numbers. They can satisfy their nostalgia craving by buying either the silver version or even the clad.

 

If this is correct, then I don't see enough collectors outside of those who collect the Kennedy half sets, modern commemoratives and maybe proof sets taking up the slack.

 

It's apparent that buying to this point has disproportionately been speculative, even by real collectors. Once the hoopla subsides (certainly by the next US Mint flip opportunity), I expect many collectors who bought it will get tired of if over time.

 

There are certainly a vast number of much better coins to buy with this money, no matter what you collect.

[BillJones]

"I just get tired of the dealers who play games with them by trying to corner markets and charge high prices as a result. With the Kennedy coins I think that there will be a melt down, and some of these people are paying high prices now will regret it in the future."

 

 

 

 

What is there to do? Reforming capitalism would be quite a daunting undertaking.

 

You are right. We can't and should not try to reform it, but as collectors we can say "NO!!" to those dealers and not buy from them. There will be enough Kennedy coins to satisfy the demand, and the coins can be purchased from sources who did not engage in the initial efforts to corner the market and sell the available pieces at inflated prices.

 

You have to have a Kennedy coin with specific slab on it, I suppose that you will have to pay the pigs, at least for while. But I have no need for such things. I have one in the original mint box, and that's the way I want it. Special slab labels have no allure for me.

[Conder101]

They should produce 30,000 or more a week and FLOOD the market

They probably could, but then the average coin would probably be a 67 or 68. (That 6000 per week is probably what they figure they can produce and keep the quality high.)

 

But the Mint can stop this insanity with the Kennedy Golds by simply making more of the product.

They really can't, and shouldn't, make more than get ordered. They supposedly had on hand on first day of sales somewhere around half of all the coins that have been ordered so far. If they have been making 6000 a week since then they have already produced close to 80% of the entire number tha have been ordered. And within about two more weeks they will have caught up with all the orders. So within about a month after the first day of sales it will pretty much be a strike to order situation.

 

 

I make the last comment because while I believe some non-collectors will buy it and many more potentially are interested in it, I don't see them buying it in large numbers.

Agreed, but I don't see many of those people caring about the special labels, or super high grades etc. They would be just as happy with one from the mint at issue price. I don't see them as a source of support for high premiums.

[RWB]

What's the gold content again....0.75 T oz? 0.9999 fine?

[Afterword]

"....as collectors we can say "NO!!" to those dealers and not buy from them. There will be enough Kennedy coins to satisfy the demand, and the coins can be purchased from sources who did not engage in the initial efforts to corner the market and sell the available pieces at inflated prices."

 

 

 

 

I suspect that those of like mind are doing so.

 

 

 

 

[GoldFinger1969]

They probably could, but then the average coin would probably be a 67 or 68. (That 6000 per week is probably what they figure they can produce and keep the quality high.)

 

They should be able to produce similar quality with all the technological improvements out there.

 

They really can't, and shouldn't, make more than get ordered. They supposedly had on hand on first day of sales somewhere around half of all the coins that have been ordered so far. If they have been making 6000 a week since then they have already produced close to 80% of the entire number tha have been ordered. And within about two more weeks they will have caught up with all the orders. So within about a month after the first day of sales it will pretty much be a strike to order situation.

 

I would just keep producing, running the Mint 24/7. Maybe they need to expand their capacity.

 

I would even sell direct on Ebay and other websites to directly flood the market. Let's see how many MS69's and MS70's get sold at 200-500% premiums, or even coins-in-boxes at 75% premiums, if the Mint is selling direct for 25% or less over bullion spot.

 

BTW, what was the original Mint asking price for these coins earlier this month ?

 

[AHFreak]

In case this hasn't been mentioned here already, All you guys who are hoping/wishing/waiting/etc for the price on these Gold Kennedys to plummet and crash..... IT IS HAPPENING! I have a friend who bought several hundred of them, and he told me yesterday you cant give the damn things away.... None of the dealers around here will even buy them for ISSUE PRICE"... Its going to get fun when you can go pluck these up by the dozens at a slight premium above melt value.....

[GoldFinger1969]

In case this hasn't been mentioned here already, All you guys who are hoping/wishing/waiting/etc for the price on these Gold Kennedys to plummet and crash..... IT IS HAPPENING! I have a friend who bought several hundred of them, and he told me yesterday you cant give the damn things away.... None of the dealers around here will even buy them for ISSUE PRICE"... Its going to get fun when you can go pluck these up by the dozens at a slight premium above melt value.....

 

Well, I do see some lower prices but they are all over the lot, from $1,300 - $3,000 or so on Ebay.

 

There are so many variations that it's tough to do an apples-to-apples comparison.

 

I'll keep looking for some completed sales on Ebay in the sub-$1,000 range but not sure we are there yet.

[GoldFinger1969]

What's the gold content again....0.75 T oz? 0.9999 fine?

 

Yup.....

 

http://catalog.usmint.gov/webapp/wcs/stores/servlet/ProductDisplay?storeId=10001&mpe_id=10101&productId=17610&intv_id=10551&evtype=CpgnClick&langId=-1&catalogId=10001&ddkey=ClickInfo

 

Why is even the original price 30% over spot

[Catbert]

I admit to not having read this entire thread, but want to convey my two cents.

 

Market forces (supply and demand) will even out and thus will pricing. Working the mint 24/7 to hurt speculators is silly and unnecessary, IMHO.

 

This situation is a classic "greater fool theory" in action. Happens every day in the stock market, real estate, art market, etc. The Beanie Baby craze didn't kill anyone and, while I find the behavior of certain dealers very distasteful, it isn't worth getting so upset over the situation. Sometimes buyers/speculators receiving a painful lesson inspires not repeating stupid decisions.