Something has happened to our money. And no, not just that the American peso has dropped historically against the euro, making trips to France and Italy half-again more costly than they used to be.

Rather, our $5, $10 and $20 bills and our coins have suffered a severe drop in quality when considered as art.

Yes, money is art, whether it’s the engraving that makes up the bills or the bas-relief sculpture on our coins. There are long histories in both as art mediums, from the intricate lozenge-and-dot portraits of the 17th and 18th centuries and the commemorative medallions struck from the Renaissance on.

But craftsmanship at the mint and at the Bureau of Engraving and Printing has declined precipitously, leaving us with wallets full of bad art. This wouldn’t be so noticeable if the older coins and bills hadn’t been so beautifully made.

“When I compare our money with European money, ours has fallen quite flat in design and execution,” says Dan Mayer, printmaker for Pyracantha Press at Arizona State University.

Look at an old bill, before the anti-counterfeiting “improvements” of the 21st century. Not only are the portraits more lifelike - there’s a personality behind the eyes in Grant’s picture on the $50 bill - the designs also are fuller, more detailed and graceful, full of trailing acanthus and olive leaves.

The vegetative growth and architectural motifs that used to grace our bills announced our national fecundity. We were a waxing moon, a rising tide. The scrollwork and border ornament recalled the inventive bustle of the Renaissance. Read Full Arizona Republic Article

By Larry Edelson

Gold fell from its record-high of $1,038 set on March 17 down to the recent $850 level. But Edelson does not believe this is the end of gold’s bull market based on two possible macroeconomic background scenarios for gold.

The first scenario Edelson outlines is if the Fed’s efforts to save the U.S. economy and financial system succeed and the credit crisis eases.

Under this scenario, the Fed’s recent actions of slashing interest rates and pumping money into the economy are successful — the U.S. economy recovers and global growth resumes.

As a result, the credit crunch eases, and money flows through the pipeline. The big commercial and investment banks finally stop taking massive write-downs on bad mortgage securities, foreclosures shrink, home prices stop hemorrhaging, and home sales pick up. Businesses start hiring and consumers resume spending.

In this scenario, many on Wall Street would say that gold’s bull market would be over. However, if the Fed is successful at turning the U.S. economy and credit crisis around, it will only be because it flooded the system with hundreds of billions of paper dollars, creating wild inflation. If the economy were to pick up on top of that, between inflation and resumed economic growth, global demand for gold would soar.

The argument could then be made that when the economy turns back up, the Fed will head off inflation by aggressively raising interest rates, choking off the bull market in gold. But, from late 2004 to mid-2006, the Fed raised interest rates 17 times, in steady quarter-point increments to 5.25% from a low of 1%. And over that period, gold surged 127%! (more…)

Jaded Professional Numismatist that I am, I sometimes need to be reminded what coin collecting is all about. I recently attended the first official meeting of the newly-formed 20th Century Gold Club and it left me feeling really good about the state of the hobby. It reminded me that coins are about more than upgrades, slabbing disputes, Registry Set battles and message board bickering: they are, more than anything else, about fraternity

The 20th Century Gold Club was founded by two prominent collectors of gold coins minted between 1907 and 1933. The club is by-invitation and it includes a number of the most serious collectors of American gold. The group is unique in that it not only includes these collectors but it incorporates prominent professionals who are Associate Members. The list of these dealers and researchers is extremely impressive and I was flattered to be included in a group that featured David Hall, Mark Salzburg, David Akers, John Albanese, Jim Halperin, Kevin Lipton, Todd Imhof, Mike Moran and Roger Burdette.

The meeting was held in Dallas and it was refreshing in that it wasn’t held in conjunction with a show. This meant that I was much more relaxed than I typically am at a show (if you’ve ever spent time with me at a coin show you know that I can be pretty intense and that I rarely have time for non-business chatter). It also helped that the meeting was held at a world-class five star hotel, was catered with incredible food (thanks to Heritage for the chow and the logistics) and that the weather in Dallas was perfect.

I thought one of the most interesting things about the meeting was the lack of agenda. All of the dealers were on their best behavior and no one was secretly passing out business cards looking for new clients. It was great to be able to chat with David Hall and not be worried about my latest round of PCGS grades. (more…)

By Laura Sperber of Legend Numismatics

In the past few weeks we have been offered more coins than normal from collectors. However, the majority of coins that are offered were recent purchases that people are coming to find out they can’t resell for a profit, or even close. Some coins came from auctions, some were even bought a year ago, no luck. We do need coins VERY badly, but we are not going to over pay for weak pieces. What’s going on here?

After every major auction you read how coins brought “moon” money and how we all can’t find anything anymore at shows. We dealers make it sound like there is no limit to how strong or how high prices are. It is all true, REAL coins are unquestionably bringing real money.

What is happening is there is now a huge and very real separation of quality. A year ago, it was acceptable to buy a coin that is 95% there for full ticket. Today, if you don’t have 100% full quality and eye appeal in coin, forget it, you most likely will lose money.

Gone are the days when you could buy out of sale and “flip” it to a dealer. The market has reached its saturation point on the lesser quality material. We strongly believe CAC expedited this gap (which was bound to happen any way). The sophisticated buyers either demand CAC stickered coins or they demand the coin be all there. Nothing less is acceptable today. The market-especially in auctions is proving that clearly.

Just because you get caught up in the spur of the moment and bid aggressively in an auction does not guarantee you that there will still be someone right under you. And if the coin has issues (low end, ugly, etc) you are plain old stuck. The grading service does not matter. (more…)

To know which asset class will appreciate in value, you have only to follow the money. When the stock market is gobbling up all of the available discretionary funds, you know that alternative investments, such as rare coins, are going to do poorly. On the other hand, bear markets in stocks cause net withdrawals, which in turn support the prices of alternative assets as investors seek better returns.

There have been numerous articles in the financial press that have talked about the resemblances between 1987 and 2007. The topic is of interest to us because of the absolute explosion of the rare coin market that took place after the stock market crash of 1987. The crash precipitated a stampede to alternative assets like rare coins and, in a little over two years, the market in investment grade rare coins went up several hundred percent even as the price of gold fell from $500 to $360.

Financial conditions today lead us to believe that the rare coin market is poised to duplicate the bull market experienced 20 years ago. Today, we’re hearing much of the same language that we heard in 1987, when Alan Greenspan said that the world was on the edge of a global financial collapse. In fact, Greenspan said that the current market turmoil is “identical” in many ways to that which occurred in 1987.

The stock market crash in 1987 and the credit market crisis in 2007 both served to reverse the flow of funds into stock mutual funds. According to the Presidential Task Force on Market Mechanisms, appointed by President Ronald Reagan to investigate the October 1897 market crash, skittish fund shareholders withdrew billions of dollars from stock mutual funds and added to the market’s fall.

Read the Full Blanchard Article Here