Spring 2004

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IPA: Well Mike, it has been ten years since you began publishing Investor’s Profit Advisory. Looking back, what are you most proud of?

MIKE: I’m most proud of winning six consecutive Numismatic Literary Guild newsletter awards for Investor’s Profit Advisory (1997- 2002). Additionally, over the ten years, we also received three (3) Book of the Year Awards, as well as, fourteen (14) awards for television, radio and internet reporting on rare coins and precious metals. Receiving this kind of long term recognition from industry peers for our publishing work is particularly gratifying.

IPA: How is the rare coin market different today than when you first started publishing?

MIKE: Today’s market is much broader, especially in terms of dealer quality. Today’s firms are larger, well capitalized and usually employ numismatic experts within the company. They have gained significant market share over the local “mom and pop” dealers of the past, who now favor baseball cards, jewelry and other collectibles over rare coins. Due to the professional marketing and national advertising these firms use, there has been a dramatic increase in the number of active collectors and investors. This has supplemented an additional dramatic increase in the collector base resulting from the TV home shopping networks and the U.S. Mint’s new state quarter program.

IPA: What is the most positive aspect about today’s market?

MIKE: Today, major companies are seeing anywhere from 2-5 times more “new” customers than even just two years ago. Furthermore, reorders by these same clients are up to 2-5 times. For the rare coin and precious metals market this is “bullish.”

IPA: What is behind this dramatic increase?

MIKE: It’s no secret, uncertainty fuels rare coin and precious metals “bull” markets. Today’s “war on terrorism” may be the ultimate uncertainty, which is, at best, an “open ended” proposition. Right now, we can’t see an end to it. So, terrorism breeds uncertainty and drives investors world-wide to protect their assets with precious metals and rare coins. Since the capitalization for precious metals and rare coins is “tiny” compared to equities markets, it only takes a small amount of wealth consistently flowing into these markets to dramatically impact prices. Conversely, “uncertainty” is a major enemy to equities markets, including gold mining stocks. In 1997, a full four years before 9/11, we did an interview with Oxford Club consultant, Bob Meier, in which he explicitly stated that the biggest threat to the United States economy is terrorism. Given the events of the past few years, I would say Bob Meier has an accurate crystal ball.

IPA: How are collectors and investors responding to this bull market?

MIKE: Because the uncertainty of the War on Terrorism is open ended, rising rare coin prices are seen as a long-term trend, and not a short term occurrence. For this reason, astute collectors and investors are filling their collections with important coins ahead of schedule to avoid paying higher prices later. In times of bull market activity, the same phenomenon occurs in other high end collectible markets, like art. Just the other day, an early Picasso set a new world record at auction when it fetched $104 million, shattering the previous record of $82 million paid for a Van Gogh in the last major rare coin bull market of 1986-1990, when coin prices skyrocketed up 665%! The historic parallel is present today as well, since high-end collectibles in all areas, like art and rare coins, usually appreciate in price concurrently. The difference of course is that today the uncertainty of terrorism is open ended. Remember, from the Islamic terrorist perspective, this is jihad, a holy war. For them, it will go on indefinitely, and along with it, uncertainty continues indefinitely.

IPA: You attend your fair share of investment and rare coin conventions. In a “hot” market, collectors and investors hear all kinds of things from financial advisors. What is the most outrageous claim you have heard this past year?

MIKE: One of my managers recently attended an investment conference and actually heard a known dealer advising people to pay sums in excess of $10,000 in cash for their coins, and he would show them how to avoid detection from the IRS. This is a big red flag, and following such advice would lead you and the dealer down the road of directly violating Federal tax and cash reporting laws. The IRS takes these rules very seriously, and I have heard of some otherwise good people going to prison for such violations, even when their actions were unintentional and without knowledge of the laws. So collectors and investors should be very careful and wary of anyone making such claims. No one needs that kind of worry in their life.

IPA: What are some of the most common questions that collectors and investors ask?

MIKE: The most common question is: what are my personal coin recommendations? I simply direct them towards my Final Five, which features Type II & III $20 Liberty Double Eagles, $21/2 Indian Heads, Gold and Platinum American Eagles. The reasons for these recommendations are featured throughout this newsletter. Occasionally I am asked: are there any good stocks in collectible companies? My first response is I do not recommend stocks. Also I advise, if you are going to buy stock, do your due diligence before purchasing any stock. Personally, I own stock in Collector’s Universe, which is the biggest collectible company stock available I know. The past year the stock price was up and down between approx. $3 and $11, but they seemed to have resolved some investor concerns after selling off some unprofitable operations in February, like Bowers and Merena, and taking a substantial loss. They now seem stronger to some. But, you shouldn’t take any one person’s recommendation. In fact, I routinely advise extra due diligence when a stock is recommended by anyone, including newsletter publishers. When I see newsletter stock recommendations, my first thought is whether the recommended company gave any kind of “kickback” or stock option to the publisher. For example, a disclosure in fine print about a substantial advertising subsidy amount, which may imply a sort of quid pro quo arrangement. In the case of small cap stocks, there is extra incentive to do extra due diligence, because such recommendations can wildly effect short-term trading volume and stock prices, and may give a false impression of the true market capitalization and liquidity.

IPA: How do you get extra value for your customers by being discriminating in your purchases?

MIKE: There are three parts to our service equation that we feel deliver real value to our clients. First, we get first shot at most new deals that become available in our product areas. Second, we hand-pick each coin to insure our clients only get the finest coins available. Our rejects are often offered later to the smaller dealers, sometimes at deep discounts. Third, we offer a guarantee that we will replace any coin at any time for a similar coin to insure the client believes they have the best coin available.

IPA: Is it advisable to buy coins for the cheapest price possible?

MIKE: No, not always! The first time I learned this lesson was in the early 1970’s. There was a dealer, named Dean, who had a large selection of uncirculated silver dollars in original rolls. They were priced at $2.50 per coin. However, astute, expert buyers would pay Dean a $.50 premium to hand-pick the best coins out of thousands he had available. That premium, which then amounted to about 20%, paid off ten-fold when I later sold these coins from my collection in early 1980’s. Any dealer who has been around for 20-30 years, can tell similar stories. Paying a small premium for expertly, hand-picked coins could later significantly enhance value and/or liquidity. This is why to this day, I still follow the “hand-picked” philosophy to insure my clients get the best of the best, be it a Certified $20 Liberty, or even uncirculated gold, silver or platinum American Eagles. Our typical hand-picked coins are not just the run of the mill coins normally found on market. When possible, it is best to have a recognized expert, preferably one who has also served as a grader at a major grading service, hand-picking your coins. This is a big advantage to you!

IPA: In selecting a coin dealer, is a fixed price, “buy back” guarantee an accurate representation of a dealer’s skill and reputation?

MIKE: The Federal Trade Commission brochure advises to “beware” of dealers who offer such guarantees. When I interviewed Barry Cutler, the former FTC Consumer Division Chief, he raised extreme concerns about this practice. Armon Vartian, a leading numismatic and precious metals attorney I know, sees FTC and possibly SEC risks inherent in this practice with potentially serious legal repercussions. All the dealers that I routinely deal with, have been advised by their respective counsels to not engage in this practice. Letters from Mr. Cutler and Mr. Vartian are available upon request to me personally.

IPA: How does this current bull market for metals and rare coins compare with past bull markets?

MIKE: It has been slower to build momentum, but has also been more broad based, which is healthier for the market over the long-term. Past markets quickly doubled, and then redoubled a couple of years later, only to flame out and crash, because their support was not as widespread. Today’s market is more informed with new rare coin books stimulating an expanding collecting interest. Over the past three years, my own award-winning books are being used by an increasing number of national dealers and thousands of collectors. The newly revised books on Type II and Type III $20 Liberties are now available. The books retail for $29.95 each, but you can receive copies for $10 total, post-paid, by simply calling your account representative Toll Free at (800) 459-2646 before July 31, 2004 and give my middle name, “Ray”.

IPA: Are there any areas where you recommend caution?

MIKE: While I personally like the St. Gaudens coins as collectibles, I routinely advise caution because their market is volatile and unpredictable. These coins used to be used for balance of trade payments in the 20th century, and many bags of uncirculated coins wound up in Europe. Periodically, entire bags of these coins show up and hit the market dramatically increasing certified population reports. As a result, prices fluctuate wildly between dealers due to these relatively large and periodically increasing populations. Past price records for the popular and beautiful $20 St. Gaudens can’t be discussed seriously without taking into account the huge population increases in the past ten years inherent to the St. Gaudens series!

IPA: Any thoughts on new shipwreck S.S. Republic coins?

MIKE: I also advise caution with hoard treasure coins, like the recently recovered S.S. Republic coins. There is merit and fun to be had from owning one or two coins for serious collections, but be very careful about the price you pay. Prices are often somewhat high during the promotion phase of a hoard treasure’s release, but then fall back some time later after the promotion has ended. When large quantities of any one coin are recovered prices tend to decrease over time, sometimes dramatically after the promotion ends. Subsequently, these coins may not see their promotion price levels again for a very long time. So, while I recommend them as collectibles, I do not recommend them as investments.

IPA: How will this shipwreck hoard effect other coin prices?

MIKE: In 1999, I released my award winning book on Type III $20 Liberties. About the same time, the S.S. Central America hoard of Type I Liberties was first being marketed. Thousands of new collectors started with the S.S. Central America coins, and then sent prices for Type III Libs up 70% in one year. Why? Because the more rare Type III Libs were one of the next logical places to go to build their collections. Wayne Gretzky used to attribute his success on the ice to “knowing where the puck is going to be.” In other words, buy today what you believe other coin buyers are going to be looking for tomorrow, or next year. Buying coins with limited quantity versus buying coins of boatload quantity is usually the best strategy long-term. Remember, they have recovered about 50,000 coins from the S.S. Republic and that only represents about 23% of the estimated hoard. So, be very careful about price with these coins, as future recoveries could send prices down over time. But, if you come across a special rare coin that you want, just to own for fun, buy it. It may not appear again for a very long time. Be forewarned, if you own a coin found in large quantities in this hoard, it may take a sudden dip in value!

IPA: Well, in modern terms, the 10th anniversary is a diamond anniversary. So, happy diamond anniversary. What are you looking forward to?

MIKE: Receiving the platinum gift for the 20th anniversary and my 25th wedding anniversary with my wife, Karen, on May 26, 2004!

The Rare Coin Election Year Bull Market Phenomenon

Target the Intersecting Circles

When I used to teach school, I knew I could get the attention of kindergarten kids with the story of the intersecting circles. Even today, when speaking with adults, the same lesson works. (What was the title of that best-selling book? “All I Really Needed to Know I Learned in Kindergarten?”) In the case of rare coins, I seek the intersection of the collector, investor and coin market dealers.

We like to choose coins, like Type II and III $20 Liberty Double Eagles and the $21/2 Indian Head Quarter Eagles, that have as many different collector and investor groups needing them in the future as possible. We use intersecting circles of different sizes to represent growing or waning collector or investor interest in particular coins we select for our clients. By looking at the collector market this way, we are able to better advise customers about potential rising or falling coin prices on coins they need to complete their collections.

Gold Shines and Rare Coins Blaze When Stocks and Bonds
Falter As Election Years Approach

The harshest bear markets in stocks & bonds of the past 20 years (1973-74, 1976-78 & 1987) led to three of the biggest rare coin bull markets (1972-74, 1976-80 & 1986-90).

On September 21, 1976 a huge 525 day bear market in stocks began, and when it ended on February 28, 1978, the Dow Jones Industrial Average had fallen 26.9%.

In contrast, a rare coin fund that began shortly before Jimmy Carter’s election, then auctioned off in 1980 increased over 600%! Investors and fund managers seeking alternative investments, looked to diversify into hard assets and made rare coin performance like this a common occurrence.

A second, more dramatic example occurred on August 25, 1987, when the Dow plummeted 36.1% in a mere 55 days. Once again, fund managers, investors and Wall Street firms began looking for alternative investments and increasing their cash positions.

Just 12 months after that fateful day, the Dow was still down 22.8%. How were rare coins doing? An eight-piece set of U.S. gold coins in high grade, representative of the market, was up 74%! By June of 1989, that same gold set was up 123%, while the Dow was still down 6%.

John Sack, First Vice President of Futures for Shearson Lehman Hutton said “What’s happening is we think the rare coin market can now be considered like most other financial investments. When equities falter, investment in rare coins by Wall Street will soar. With certified coins, we now feel there is a confident enough market, a sight-unseen market, to offer products to a retail base.” Soon thereafter, Merrill-Lynch entered the market with a rare coin fund boosting interest and prices higher.

Historical Background of “In God We Trust” on Our Money

The brainstorm for the motto: “In God We Trust” started with Mark R. Watkinson, a Baptist minister. On November 13, 1861, he wrote to Salmon P. Chase, Secretary of the Treasury, requesting that God be acknowledged on U.S. coinage. He was extremely direct in his letter, stating that the motto would “relieve us from the ignominy of heathenism.”

Chase acted with remarkable speed and one week later – in a November 20, 1861 letter to James Pollock, U.S. Mint Director – Chase noted: “No nation can be strong except in the strength of God, or safe except in His defense. The trust of our people in God should be declared on our national coins. You will cause a device to be prepared without unnecessary delay with a motto expressing in the fewest and tersest words possible this national recognition.” The motto “In God We Trust” is probably derived from a line in Francis Scott Key’s 1814 poem, “The Battle of Fort McHenry” (later renamed “The Star Spangled Banner). The exact line is “And this be our motto, In God is our trust.”

On April 22, 1864, an act of Congress authorized the mint director to determine the mottos on U.S. coins, provided the Secretary of the Treasury agreed. The first $20 gold piece to have the addition of the motto “In God We Trust” was the Type II $20 Liberty, which was issued in 1866 and continued unchanged until 1876, a scant 11 years. Design modifications were initiated in 1877, unrelated to the motto, and this Type III $20 Liberty design continued being struck until 1907.

New designs were implemented for both the $20 and $10 gold pieces in 1907 and the motto was omitted per President Theodore Roosevelt’s request. (Subsequently, this created extreme demand over the past century for coinage from this historic period!) Roosevelt was a devout member of the Dutch Reformed Church, as well as the Freemasons, and believed that placing the name of God on currency was a debasement that amounted to blasphemy. Roosevelt noted that these coins bearing the name of God would be stepped on, used in gambling, prostitution, hiring of assassins and the purchase of murder weapons.

In the 1860’s, those who opposed the motto used to mock it by satirically changing it to “In Gold We Trust – All Others Must Pay Cash.” These negative sentiments during the motto’s implementation were mostly forgotten by 1907. Given today’s weak dollar, how appropriate the bastardized versions of the “motto” are!

Congress, as well as the general public, disagreed vehemently with the motto’s omission. There was an overwhelming reaction that anyone opposing the use of God’s name on currency was an atheist and possibly an anarchist. It was therefore ordered by Congress that all coins large enough to accommodate the motto should do so, in compliance with the Act of March 3, 1865. Thus in 1908, the “motto” was restored to the $10 and $20 gold pieces and remained there, until they ceased being minted in 1933.

The Act of Congress on May 18, 1908, in response to public demand, made the “motto” required on all coinage, except one cent, five cent and ten cent coins. By 1938, when the Jefferson nickel was introduced, all contemporary coinage had the motto “In God We Trust.”

The motto on paper currency had its beginning in 1953 with Arkansas businessman Matthew H. Rothert, who noticed in a church collection plate that coinage and not paper money had the “motto.” He wanted to send this message abroad, as paper money had wider overseas distribution than coins. He stated, “a message about the country’s faith in God could be easily carried throughout the world if it were on United States paper currency.”

Mr. Rothert’s correspondence with the Secretary of the treasury George W. Humphrey resulted in a deluge of letters and public support targeted at Congress. Legislation was introduced and passed by the 84th Congress and Public Law 140 was signed by President Dwight D. Eisenhower on July 11, 1955. “It provided the “motto” appear on all U.S. coins and paper money. By October 1957, one dollar bills bearing “In God We Trust” were first placed in circulation.

As you can tell, the motto has definite origins in religious thinking and belief. What many people are unaware of is the number of legal challenges the “motto” has heretofore withstood. One prominent attorney was prompted to summarize that, “The motto ‘In God We Trust’ has been deemed by the courts to be a tradition, like a Christmas tree, and to have little, if anything, to do with God or religion.”

The Saga of the S.S. Central America

One of the ships that plied the Caribbean in the 1850s was the massive S.S. Central America. Today, it would be called the “Titanic” of her century. Though launched five years after gold was discovered in California, this ship had four years of golden glory on the seas. From 1853 to 1857, the S.S. Central America carried approximately one-third of the entire output of the California Gold Rush. Then, in the hurricane season of 1857, she was smashed and sunk off the coast of Cape Hatteras on September 12, 1857.

For 130 years, this treasure of gold coins from the San Francisco mint lay asleep in the deep. Then, from 1987 to 1990, the treasure was recovered, setting many legal and historic precedents along the way.

There were three tons of gold aboard, and approximately $1 billion (the “b” word) worth of numismatic treasures. The S.S. Central America artifacts constitute the most important recovered treasure in American history and are destined for incredible media exposure in the next few years – via movies, books, TV documentaries and even infomercials.

When this store of gold is finally marketed to the general public, it will create tens of thousands of new collectors of dated gold coins. This effect will be similar to the marketing of past major silver dollar hoards (such as the Redfield hoard) that expanded the base of silver dollar enthusiasts and helped shoot prices upward, even (and especially) for coins not in the hoard!

We have been told that most of the gold coins recovered on the S.S. Central America are 1857-S (from the San Francisco mint) $20 Double Eagles, with many 1856-S and lesser amounts of 1855-S and 1854-S Double Eagles. There are far fewer numbers of $10, $5 and $21/2 gold coins. The vast majority were the $20 coins, since they were easier to count, stock and inventory, while the smaller denominations were more commonly used in circulation in California.

Why This Discovery Is Important To You

There’s an old law of economics, drafted by Jean-Baptiste Say, known as Say’s Law, that says: “Supply creates its own demand.” In the case of the S.S. Central America, a new wave of supply will not only create new demand, but it will also make the other dated gold double eagles even more rare, by comparison.

In other words, when this historic Type I Double Eagle hoard is marketed, it will create intense demand for certain non-hoard gold coins as well. Many buyers of Type I Liberty Double Eagles (i.e., those minted 1849 to 1866) will want to buy all three of the different design types of Liberty Double Eagles.

CONGRESS AND COINS

Jimmy Hayes is a Congressman from Louisiana. He also collects coins. “For over 20 years, the name Jimmy Hayes was synonymous with first year “type set building.” In layman’s terms, he built a set of coins that consisted of a coin of every design type from the first year the design was minted and issued. Jimmy always strived to obtain the highest grade available for a particular coin, so his sets mostly graded MS-64 and better. Jimmy is one of three founding members of the U.S. Commemorative Coin Society. His love of commemoratives was shown by the fact he completed one of the finest known sets of U.S. commemorative coins.

Jimmy had fun with coins. He appreciated their history and beauty, but when he placed them up for auction a few years back, he also gained an appreciation for their value. You see, Jimmy’s penchant for set building and obtaining high-quality specimens provided him with the funds necessary to successfully run for Congress from the 7th Congressional District of Louisiana. He remains an avid coin enthusiast who fully appreciates coins as works of art and historical artifacts. While you may never need proceeds from your coins to run for Congress, if you’re not careful, they will give you a great deal of pleasure and fun along the way.

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Coin of the Month #1: 1911-D $2 1/2 Indian Head Quarter Eagle

In 1967, at the age of 12, I was already an avid coin collector, but I had still not yet acquired my first gold coin. I simply did not have the money necessary to buy one. All I could do was gaze at the photographs in Richard Yeoman’s “Red Book” and dream. Luckily, something happened to solve my dilemma. Whenever my grandmother came to town, she would take me with her on Friday nights to play Bingo at the Knights of Columbus Hall, where high school football games on the radio were only interrupted by the calls of “B-12” and “I-26.” One lucky night, I won the jackpot. With $50 burning a hole in my pocket, I knew I had to buy a gold coin. Like many collectors before and after me, I knew my first gold coin was going to be a $2 1/2 Indian Head Quarter Eagle. I had always been fascinated by the unique incuse design, and the stories about how people thought the recesses harbored germs that caused outbreaks of illness – a story that makes this coin popular amongst physicians to this day!
 

Coin of the Month #2: Type II $20 Liberty

Why You Should Act Now to Own the Rarest of the $20 Liberty Gold Coins

Type II $20 Liberty Double Eagles are so rare only one collector in 1,000 can hope to own even one of these rare gold coins. However, if you act now, you could be one of the fortunate few. Here’s what you need to know:

They are called “Type II” because this was the second $20 Liberty coin design to be minted, and the first to bear the motto “In God We Trust.”

These coins are twice as rare as Type I Liberties by mintage, and ten times more rare than Type III Liberties in population reports. In fact, those coins are 100 times more rare than the popular $20 St. Gaudens in “mint state” grades.

The Rarest of All $20 Gold Liberties

That’s because Type II $20 Liberties were minted only between 1866 and 1876. Then, after just 11 years, the coin was again redesigned, making these the shortest series and thus the rarest of all $20 gold Liberties.

Then, leading up to the Gold Confiscation Act of 1933, over 95% of these Type II coins were melted down or destroyed, the highest destruction rate for a post-1850 series. Of Type II coins that remain, those that are premium quality, almost uncirculated and uncirculated, are even harder to find. Imagine what will happen to prices for these coins if demand for rare coins begins to soar!

Knowing this is about to happen is like knowing exactly where a new interstate highway is going to be built a couple of years from now. Or, as the famed Wayne Gretzky used to say, “The secret to success on the ice is knowing where the puck is going to be!”

New Currency Update

The new series of 1996 $100 bills were released March 26, 1996. Meanwhile, the U.S. Treasury keeps on assuring us that there’s no counterfeiting threat to U.S. currency, but we can’t hear what Secretary Rubin says, when watching what he does.

If there’s no counterfeiting threat, why the $31.7 million public relations and marketing campaign to introduce the $100 bill?

If there’s no threat, why did Congress appropriate $5 million last fall to send 28 Secret Service agents abroad to battle the fake $100 bills?

If there’s no threat, why does Secretary Rubin keep assuring us there’s no threat?

In a report released the day before the hearing, the watchdog Government Accounting Office (GAO) criticized Treasury officials for moving too slowly to place all the Secret Service agents at their posts abroad. Since Congress authorized $5 million for 28 agents last September, only five have been sent.

Former Bureau of Engraving & Printing chief, Robert Leuver hammered on the questions that Treasury keeps trying to bury. “If there’s no threat, why the hearings?” Leuver asked. “Quite simply, there are two nagging questions. What is the extent of counterfeiting outside the United States? And, if there is major counterfeiting outside the U.S., what is the best way to replace the many types of genuine and spurious U.S. currency circulating outside this country?”

Prepared by the Almighty ...

“By common consent of the nations, gold and silver are the only true measure of value. They are the necessary regulators of trade. I have myself no more doubt that these metals were prepared by the Almighty for this very purpose, than I have that iron and coal were prepared for the purposes in which they are being used.”
-Hugh McCulloch (1808-1895)

The Gold Market Is Tiny

Compared to bonds, stocks or mutual funds, the gold market is tiny and the rare coin market’s capitalization is even tinier. Even if a tiny trickle of the money flooding into mutual funds dipped into gold, gold would burst through every price barrier like a tidal wave across a sand castle. In the middle of June 1996, IBM’s market capitalization was over $56 billion. GM’s capitalization was over $42 billion.

What about gold? At the same time, all the gold in New York Comex warehouses amounted to 1,667,722 ounces.

At the then current price of $384 per ounce, you could have bought the entire Comex gold stock for a measly $641 million about one percent (1%) of IBM’s capitalization! It just doesn’t take much money to move the gold market.When mutual fund money panics, gold will show a massive run-up and rare coins eventually rise in price even more. Start completing that collection soon!

Supreme Court Hammers A Footnote to Our Privacy Issue

In case you missed our privacy issue last month, the Supreme Court hammered on a nasty footnote in Bennis vs. Michigan. Once again, the Supremes have favored police state seizures over innocent citizen’s property rights.

Tina Bennis was suing to recover her car, seized by Michigan police when they caught her husband in the car in flagrante with a prostitute. Never mind that she was innocent of her husband’s crime, that it was the only car she had, and that she had paid for it herself. The black-robed Defenders of the People’s Rights wrote, “In the most recent decision on point, the court concluded that the innocence of the owner of property subject to forfeiture that has almost uniformly been rejected as a defense.”

In more than 80% of asset-forfeiture cases the property owner is never charged with a crime.

You can find many more cases of privacy invasion in The Right to Privacy by Alderman and Kennedy (Alfred A Knopf, 1995). Just how long can some government bullies keep up outrageous violations of privacy? Alderman and Kennedy recount a horrifying example from Chicago. From 1952 until 1979, Chicago police policy dictated that every woman arrested – even those arrested for traffic infractions or misdemeanors – must be stripsearched, including a body cavity search. Men were not subjected to the same search. Even after Chicago agreed to discontinue the searches, the city still maintained they were constitutional. Thank heaven, the courts didn’t agree on this one.

Martin Weiss’s Silver and Gold Report Crystal Balls 1997

[Excerpted from an Interview in November 1996]

IPA: What do you look for in picking a coin dealer? Low prices in ads, initial price quotes, or some other variables?

SGR: Reputation, financial security and longevity. I’d rather pay 10% more for a rare coin, and know that the dealer will be there to provide hand-picked service, advice, and a market to liquidate the coin later. In the coin industry, cheaper is not necessarily better.

IPA: You would pay more for the service and information?

SGR: Yes. In fact, I don’t think there is such a thing as a discount retail rare coin or bullion dealer right now.

IPA: Oftentimes, newsletter writers recommend dealers – sometimes voluntarily, but sometimes for a kickback.

SGR: Silver & Gold Report is not affiliated with any dealer. We are completely independent and impartial. We do recommend dealers from time to time, but only based on expertise, performance, price and longevity. Do I know this person to be honest? Have I seen him exhibit the character that ensures my subscribers are safe with him? In no way do I take any personal favors, compensation or kickbacks. We don’t even let dealers advertise in the Silver & Gold Report, and we only recommend a handful of dealers.

IPA: What about professional awards that dealers receive? Can they all be discounted too?

SGR: Recognition is very important. If somebody has a string of customer service awards, and special achievement awards, and is active in the industry. It’s not the biggest factor, but certainly something you should consider.

IPA: Is there any value in building sets of coins under a dealer’s expert guidance? Will well thought out sets really bring a “set premium” upon resale?

SGR: If you’re a collector, and you’re putting away coins for the very long term, then obviously you’re better off putting sets together than buying coins piecemeal. Right now, I am working on a collection of Russian coins, not because it’s a good investment, but because I love the coins and the history. I also collect hand-picked MS-65 Standing Liberty quarters, not because I expect to make money, but because I like them. Will I realize more money from the coins when the sets are complete? Yes, absolutely!

Mike Fuljenz Receives the 1995-1996 American Numismatic Association Presidential Service Award We are proud to have received a President’s Award from the American Numismatic Association for continued service to the coin community. Only a small group of select dealers have ever received this award from the largest coin collector organization. The prestigious proclamation is reproduced here: Why You Own Gold In April 1993, the Russian Ruble collapsed, losing 99.9% of its value in one week. Prices rose 1,250%. It couldn’t happen here? Maybe not. Maybe it would only be as bad as Israel in recent decades, or Bolivia, or Argentina, or Germany, or Hungary, or China, or Nicaragua, or two dozen other countries where the currency has collapsed one or more times this century. Be prepared! Mike Fuljenz: On Selecting A Coin Dealer “Don’t be fooled by low prices, even on PCGS and NGC certified coins. The coins I typically see from companies that telemarket unslabbed coins, not graded by PCGS or NGC, are usually worth only 10% to 20% of slabbed coin values. In many cases, coins I see from such promotions have usually been cleaned or dipped in silver dip. So in choosing a coin dealer, at the very least, any salesman should provide you with the name and address of the company. If he refuses to do this, he won’t even pass the “rotten fish smell” test. For your protection, here are some other questions you should ask to probe the company’s integrity and soundness:

American Numismatic Association Presidential Award Presented to Michael R. Fuljenz The American Numismatic Association Presidential Award is presented to Michael R. Fuljenz. An award-winning numismatist, Mike Fuljenz is relentless in his promotion of the hobby. From the “Market Forum” column for The Numismatist, which received a Numismatic Literary Guild award, to his numerous speaking appearances at numismatic and financial conferences, and on CNBC television’s Smart Money program, Mike Fuljenz always seems to be on the go for numismatics. A frequent and popular instructor at ANA Summer Conferences, Mike Fuljenz also has extended his expertise to the hobby as contributor to many trade publications, including Walter Breen’s Complete Encyclopedia of U.S. and Colonial Coins, A Consumer’s Guide to Coin Investment, the “Red Book” and the “Blue Book.” Formerly a grader with the ANA’s Certification Service, Mike Fuljenz has served as President of Southwest Louisiana Coin Club, and Vice President of the Society for U.S. Commemorative Coins. Now therefore do I, David L. Ganz, 48th President of the American Numismatic Association, present the Presidential Service Award to Michael R. Fuljenz. David L. Ganz President Robert J. Leuver Executive Director

Ask YOUR Dealer THESE Questions...

• Have any of the principals ever been convicted of a felony?
• Has the company or any of it’s principals ever entered into an agreement with a government agency like the FTC or SEC over their actions?
• Has the company or any of it’s principals ever entered into bankruptcy?
• Has the company or any of its principals ever received any national awards of recognition within the coin industry?
• Can the dealer provide proof of premises, storage and overnight shipping insurance?
• Does the dealer provide proper on-site security and vault storage, or does he operate out of his home?
• Is the dealer a member of the Better Business Bureau?

What To Do If You’re Stopped

You’re driving down the road, minding your own business. You glance in your rear-view mirror, and there he is: with his blue lights flashing, and he’s looking at you. What do you do next?

Not All Stops Are Equal

I have two friends, 6’7” ex-basketball players from my local university. Right after they graduated, they often drove from their city to mine to visit me, about a three hour trip on the interstate. On one trip, as they drove past a small city, a policeman pulled them over. He rousted them and for 45 minutes searched their vehicle without ever telling them why he had stopped them in the first place. Finally, he told them that the temporary license in the back window of their new Chevrolet Cavalier had come untaped and wasn’t showing.

After searching their vehicle and finding nothing, he gave them a ticket anyway.

I called my friendly State Representative. He put me in touch with the chief of police, and when I called and mentioned my State Representative’s name, the operator put me right through.

The police chief admits that, “Yes,” in this war on drugs we follow a “profile” for drug couriers. The profile includes two minority males, relatively young, in a small to mid-sized relatively new car, and my two friends also happened to be African American.

The police chief demurs, and admits they shouldn’t have been issued the ticket. “Mike,” he said, “I totally agree. You tell them that this is taken care of, and he wiped out the ticket, right there on the phone with me.
But, why should minorities have their insurance rates raised by bogus tickets? Why should they be subject to unconstitutional searches, just because they’re minorities in a “profile” car? This continues because the general public thinks, “Oh, that’s just happening to blacks and Hispanics, not to the rest of us.” If they can do it to them, they can do it to you and me…and they will!

The truth is there are good people in government, and in our police forces. However, it is equally true there are rogue elements at work in our governments, who are not necessarily concerned with your Constitutional rights. Incidents like unconstitutional stops and searches are the fuel that fires dissent. This leads to mistrust of government, and this inevitably leads to real lawlessness.

There are good people and they’re fighting an internal bureaucratic battle, which is a losing battle if you and I do not support them. Stand up for your faithful public servants who are fighting the Constitutional battle – or they won’t be there when you need them.

Peter Grandich On Stocks, Gold & Silver

As President of Peter Grandich Company, Peter is an expert writer and publisher of The Grandich Letter, and a former Wall Street money manager with first-hand experience in the trenches.

Money Managers Are Green
[Excerpted from Article – April 1997]

My analysis of the next problem explains why I won’t be invited to any more brokerage firm parties: professional advisors lack true bear market experience. Morning Star studied Fidelity Funds and fund out that out of 28 managers who manage their growth funds, growth & income funds, and conservative Stock equity funds, eleven had not left grammar school when the last bear market occurred. Twenty out of the 28 were not even managing money in 1987. This latter group supposedly manages $150 billion of Fidelity’s $250 billion.

I am not picking on Fidelity, but this does point out that most advisors have no experience driving down two-way streets. Registered Representative magazine reported that close to two-thirds of all advisors have only been in the business since 1982. With only 15 years or more experience (at this time), they can’t even imagine a day coming when people stop pouring money into their funds, and begin taking money out.
 

The Platinum Eagle Soars Into American History As the history of American coinage unfolds, 1997 will be viewed as a watershed year, as it marks the first ever strike of a legal tender platinum coin in U.S. history. The Platinum Eagle series kicks off with the first ever $100 coin. But, this is only one of many firsts for which this historic coin will be known. In addition to being the first $100 legal tender coin, the Platinum Eagle is also: The first U.S. coin series since 1972 whose weight, size, design, denomination and inscriptions were chosen by the Secretary of the Treasury, not Congress, or prior legal requirements. The first authorized legal tender platinum coins produced by the U.S. Mint in American history. The first coin series whose denominations were designated by the Secretary of the Treasury - $10, $25, $50 and the first ever $100 legal tender coin. The first U.S. coin to have imprinted the dollar ($) sign evidencing its value on the reverse of the coin. This impressive list of firsts will certainly attract investor and collector attention. Mint State circulation coinage should be available in the late fall.

Fun With Paper Money Here’s a unique idea for some of the most rollicking fun you’ve ever had. Try it at restaurants, movies or bars, and watch everyone squirm. Or wrap gifts with them, and see if your present isn’t the first one opened at the party. What am I talking about? Uncut sheets of U.S. paper money. Yes, you can order uncut sheets of $1 or $2 bills in 4, 16 or 32 bill blocks. Here are prices if you order directly from the Bureau of Engraving and Printing. Compare these prices to Macy’s or Sharper Image, where you will pay up to three times as much for uncut sheets. Order directly from the BEP using you credit cards at (202) 874-3315 from 7:30 AM to 3:45 PM Eastern time. They will ship directly to your door. What do you do with an uncut sheet? Take it with you to the restaurant, and when it’s time to pay, pull out that uncut sheet, hand it to the waiter, and say nonchalantly, “Here, just snip off what you need.” Ugly Truth As much fun as you can have with this, there’s still an ugly truth here. If you can call up the BEP, order a million bucks, and they’ll just crank up the presses to print it right up, what is your currency really worth? How much substance does it have? In the words of the Federal Reserve Bank of Chicago, “Intrinsically, a dollar bill is just a piece of paper, deposits, merely book entries. What, then, makes these instruments acceptable at face value? Mainly, it is the confidence people have.” That’s right! Our paper currency is a confidence game. If you had four hundred bucks to spend, would you rather buy $400 worth of currency printed on demand, or an ounce of gold which was created with the earth itself and will last as long as its parent? Between gold and paper, the choice is pretty clear. P.S. Never pay a premium for “miscut” paper currency. You can buy all the uncut sheets you want and “miscut” them any way you want, at no premium whatever.

Peter Grandich: A Changed Mind on Gold

[Excerpted from Interview – Oct. 1997]

During the last six months, gold stock investors have been taught entirely new and unsuspected lessons. Between the Bre-X fiasco, where one of the biggest discoveries in history turned out to be a fraud, and others, we have witnessed gold stocks proving that they are not a 100% reliable indicator of gold itself. Look at the Vancouver Stock Exchange, a good index for all speculative gold stocks. It doubled in value in three years, but lost all that gain in less than six months. Therefore, those who bought junior gold stocks because they thought gold itself was not a worthwhile investment got hit with a greater downside whack than physical gold buyers.

Mike Fuljenz: On Rare Coins

[Excerpted from interview Oct. 1997]

IPA: What are population reports?

MIKE: The grading services report how many coins they have graded. Ten million coins of a given type may have been minted, but the grading services have only seen 30 over the last 11 years, so only three coins a year on average are coming into the market. If I expect demand for that coin to increase to say, 12 coins a year, then it has a shot at stardom. The coins I generally do not recommend are $20 St. Gaudens, because in the 1920s huge quantities were shipped to Europe and South American for balance of trade payments. Complete, full bags of many dates have shown up.

IPA: So, bad surprises lay in store if your conclusions about population turn out wrong?

MIKE: That’s where a very connected, knowledgeable dealer is critical to investor success. He doesn’t rely on population reports alone, he also hears from his network of contacts when someone finds or runs a bag of that coin type through a grading service. The classic example is the Redfield Hoard, which brought onto the market numerous Morgan silver dollar dates and mints that had previously been very rare. It destroyed prevailing population assumptions – and values.

But that doesn’t tell the whole story. Redfield appeared in 1977, it was distributed, and people think it’s all gone, but the distributor of the Redfield Hoard socked back the best coins in rolls. I bought some 1895-S dollars from him. In 1987, ten years later, when everyone thought that Redfield had been distributed, many of the very best coins went through the grading services, like three rolls of a multithousand dollar rare 95-S, and some of the best Peace dollars in MS-63 and better grades.

A well-connected dealer can also help you benefit from hoard. That is exactly what I am doing with the latest hoard to surface, the S.S. Central America Type I $20 gold pieces. The sinking of the S.S. Central America was the greatest financial catastrophe of the 19th century. When it sank off Cape Hatteras in 1857, it was headed for financial centers on the east coast with its holds bulging with new California gold, about one-third of the California Gold Rush production up to the time.

Our strategy is to buy the coins that the hoard buyers will need next, because the company that sells the hoard has to sell something next.

IPA: After the S.S. Central America’s Type I San Francisco mint $20s, what’s next?

MIKE: Type II and Type III $20 Liberties, and you’ll want one with a limited population. While the Type II $20 Liberties will be among the rarest $20 Double Eagles, the Type I $20 Liberty will become one of the most common in high grade.

My daddy used to tell me, “Buy property before the Interstate comes through.” In the next few years, the interstate will drive straight through Type II and Type III $20 Liberties. The S.S. Central America story will be all over the news. After all, it is a great story, and stories sell. Remember – buy what the hoard buyers are going to need next.

When buyers are tempted to buy from a home shopping network or mass marketer, they should remain mindful of something else my daddy used to say, “Nothing good ever happens after midnight.” That holds true for many things you see on late night TV regarding coins. If you like it on TV, and just have to have it, call us and you can often buy it for less.

IPA: So, it seems you are saying the key to buying right in numismatic coins is to find a dealer who is honest, aggressive and well-connected.

MIKE: There are two ways to get ripped off in coins. The first is dealing with a dealer who has no integrity. The second is dealing with a dealer who is not knowledgeable. In short, you want a dealer who is well-connected and enjoys tremendous peer respect within the industry. Ask your prospective dealer if they have won honors or awards from their peers. That usually separates the sheep from the goats. You should also be aware that sometimes recommendations by name editors are bought and paid for in many different ways. Those that are given on merit alone are usually rare and meaningful. Ask! There are no stupid questions when it involves your money.

Why Gold Has Bottomed

Oppenheimer Strategist - Michael Metz

At the time of our interview (Aug. 1997), E. Michael Metz was the Chief Strategist for Oppenheimer & Co. in New York.

IPA: Where there are 80,000 tonnes of basically monetary gold above ground, does it make sense to talk about physical supply and demand for gold? Most gold is not consumed when it is used, so doesn’t it really take a change in monetary policy to change the gold price?

METZ: Simply to change the gold price is a change in the attitude toward this investment. The demand for gold for jewelry and other purposes exceeds new production output. The old “aboveground supply” story was as true when gold was $800, as it is today. The problem with gold [in bull stock markets] has been that central banks and other holders of gold are more likely to sell, because they have attractive alternatives for their capital.

My point is, whether it’s stocks, bonds or dollar instruments, or what have you, there comes a time when these attractive alternatives are no longer as attractive. At those times, the motive to disinvest from gold to buy other instruments will diminish. Less disinvestment in gold means higher prices for gold.

Editor’s Note 2004: For collectible coin buyers that usually means higher prices for rare gold coins as new customer response increases.

Robert Meier on Terrorism and Markets

Oxford Club consultant, Robert Meier is a well known speaker on the financial investment conference circuit.

IPA: What events have the biggest potential to impact investment and collectible prices next year?

MEIER: The biggest issue facing American investors and collectors today is the ever-growing prospect of terrorism, domestic and foreign.

The U.S. government has been meddling in the internal affairs of foreign countries and tribal groups for close to 100 years, and they are ready to pull the trigger. I do a lot of trend research. Since 1992, I have been saying in trends speeches that I felt there was early, but very persuasive evidence that the next major top in the world business cycle expansion would be triggered not by an economic event, but by a major terrorism event in the U.S. I am holding to that forecast.

IPA: Because it breaks confidence in a totally unexpected way. How do numismatic collectible coins fit into such a scenario?

MEIER: Carefully selected, high quality numismatic coins represent a very special opportunity. The history of fine art and collectibles shows to concentrate on higher quality items as opposed to middle of the road and lower quality items. That holds true in any collectible area from rugs to firearms, and it holds true for rare coins as well.

Mike Fuljenz’ Top Coin Recommendations for 1998

“Swap $20 St. Gaudens for $20 Liberties”

Sell $20 St. Gaudens and replace them with $20 Liberties. The Libs are much more rare and have far greater potential to hit a home run. Three years ago, fewer dealers were marketing them, but I personally know of three relatively new national companies, which together have sold over $20 million worth of Liberties in the past couple of years alone. They have developed thousands of new set-building collectors.

Liberty Double Eagles tend to climb faster because they are far more rare than Saints. Because of their high destruction and meltdown rate, it is also far less likely that major hoards of hundreds of bags will surface, like the bags of $20 St. Gaudens that periodically appear from Europe or South America. Remember, Saints were used for balance of trade payments, not as much for circulation, so they wound up in Europe or South America. Numerous bags of uncirculated Saints are regularly thrown onto the market, and no one knows for sure how many hundreds of bags still lurk in hidden vaults overseas. From what I’ve seen and heard over the years, $20 Libs in uncirculated bags don’t amount to one one-hundredth of the number of Saints in bag and roll quantities.

Can the U.S. Government Confiscate Your Gold Coins? Technically speaking, the short answer is: “Yes!” As we all know by now, the government will attempt to do anything it has a mind to do, whether or not the Constitution advises otherwise. However, the likelihood of the government attempting to do so is extremely remote, because the implementation and enforcement of such policy would be a logistical nightmare in these times. Besides, if such an action were to be taken by the government we would have more problems than just their attempt to grab all the gold they could to replenish what would most certainly already be a troubled treasury. The warning advisory to be wary of here is some coin dealers misrepresent the confiscation issue in order to induce sales of certain gold coins. Do not be misled into buying numismatic coins on the premise they can never be confiscated, and if you hear of a dealer representing such, you should be concerned with his integrity. The Risk Is Too Great Another competitor takes a different tack to sell his wares, in this particular case, uncirculated British Sovereigns. He writes: “Quite frankly, I feel that the chance of another government gold confiscation in this day and age is remote. But, in the final analysis, one must ask, ‘Why accept an unnecessary risk, no matter how remote?’ The stakes are just too high.” Sorry, but that old dog won’t hunt. Because we only have limited resources, we can’t eliminate every risk. Think about this: A couple years ago, a Japanese vessel in the South China Sea was peacefully fishing. Suddenly, out of the clear blue sky, a cow fell to the deck, killing one of the fishermen. When the sailors returned to port, nobody would believe their story, until later a Russian airplane crew admitted that they had pushed a cow out of their airplane over the South China Sea that day. So, clearly there is some risk that the next time you go fishing, a cow may drop down out of the sky and kill you. How can you eliminate this risk? Why, sell your fly rod and spend the rest of your days in the basement. After all, “Why accept an unnecessary, no matter how remote? The stakes are just too high?” Silly? Of course it is. No mere human being can protect himself against every risk, so we have to make prudent decisions for the best use of our money according to current laws and conditions. Currently, owning gold is legal under U.S. law, and nothing in current law promises that any gold coin you buy might be exempt from future confiscation.

Is Clinton A Nixon Rerun? I am amazed at the hypocrisy of some women’s groups. How can they fail to criticize Clinton? The commander in chief has allegedly abused his position with a 21-year old intern. If this happened in the military, he would already have been court martialed and jailed. If a male employee at any major corporation called a 21-year old intern “babe,” even as a term of endearment, he’d smart under a big fine. This is not about consensual sex, as a lot of feminists contend. This is about power, the most powerful man in the world and a 21-year old intern. Whether you’re a college president, a Merrill Lynch broker, the President of the United States, or whatever, that is reprehensible behavior. It is off the menu. Clinton’s actions may be the ultimate misuse of position and power. Furthermore, when is it ever permissible to lie under oath in child custody, alimony or any other matter that may involve adultery? You can’t say it was just consensual sex so I can lie. Where’s N.O.W. in that analogy?

Three Questions I Challenge Our Competitors To Answer

When a salesman is hot-boxing you with claims that certain gold coins are “exempt from government confiscation” just ask him these questions...

1. “Please cite the US laws, regulations or official rules that subject this coin to, or exempts it from, confiscation, and send me a copy. I want to read them for myself.”

2. “Will your company guarantee in writing that present US law exempts this coin from government seizure or confiscation? Please have a company officer sign that letter.”

3. If a salesman tells you that “so-and-so newsletter editor” recommends his firm, ask him, “Did he make that recommendation freely and without financial consideration? If I buy coins from you, do you give a kickback for each coin sold to the newsletter editor who recommended you? And, does he own any part of your company or its stock, or have stock options?”

Ask them to put their claims in writing, because I am putting my Numismatic Literary Guild award-winning views and documentation on confiscation right here in writing and signing my name to it. Will they do the same?

"Let Us Pray ..."

One day in 1984, a physician walked into my office, blood and amniotic fluid all over his surgical greens, and dropped a big safety deposit box on my desk. “Tell me these are not counterfeit,” he implored.

I opened the box and pulled out ten coins. After I had looked at them, I said, “Four of these are butter, six are Parkay.” He did not think it was very funny. He wanted me to examine more coins. For almost two years, I had worked for the American Numismatic Association (ANA), teaching grading and counterfeit detection. We sent the coins to them, and ANA validated my original judgment.

The Crook Was A Lawyer

The man who had sold these coins to the doctor (and many of his physician friends) was a local attorney. Because he was making so much money selling counterfeits to these unsuspecting doctors, he had practically shut down his practice. He haunted coin shows under the cover of buying counterfeits “for jewelry.” Dealers knew him as “the guy from the south who buys counterfeits.” Nobody suspected he was selling them to the medical profession as genuine.

Leveraging Religion

The lawyer’s deception went further than bogus coins. He went to mass together with my friend. His brother was the monsignor at one of the local Catholic churches, they went to a Medjugorie retreat together, the doctor delivered his children, and they stood godfather to one another’s children. When the attorney had triple bypass surgery, the doctor had left his own work to stay by his bedside through the ordeal. All the while, the lawyer had been cynically selling the doctor counterfeits and using him as a shill to hoodwink his friends as well. The religious masquerade was the final twist of the knife.

When the doctors confronted the lawyer with his crime, he broke down and assumed a near fetal position right in front of them. In the end, the attorney restored over a half million dollars to all the doctors he had defrauded. In the process, he threatened me over the phone (as the bearer of bad tidings, I suppose). But, in the end, he turned practically everything over to the doctors.

“I Wish There Was Something I Could Do For You”

After everything was settled, one of the physicians in the group said to me, “Mike, if there is anything I can ever do for you, please just ask.” For my services in helping them recover their money, they paid me nothing. I did it for free, because it was the right thing to do. I just wanted to help get rid of this crook, and in the process, clean up my industry’s own nest, so to speak.

In the process, I became good friends with the doctors. Later, in 1989, my wife and I learned we could never have children. If we were ever going to have children, we would have to adopt. Now my doctor friend had the opportunity to return the favor. He said to me, “Mike, now I can do something for you. The first two babies through my clinic are yours.”

A couple of months later, we received our first baby. We named him Jake and he was born in January 1989. Twenty months later, after we got Jake home, we received another call telling us a baby girl had come up for adoption. That was Katy, and we are now a happy family of four. To think, all of this came out of exposing counterfeit coins. Out of evil and grief, God in his providence brought joy and peace.

SILVER & GOLD REPORT WARNING:

Multi-Million Dollar $20 St. Gaudens Bad Deal!!

On December 12, 1997, The Silver and Gold Report blasted the latest hoard deal in rare coins, the “Wells Fargo Nevada Gold Coin Discovery. Some of the country’s biggest newsletter editors are marketing these $20 St. Gaudens coins as a great investment, but behind the curtain the smell of dead mackerel leaks out”.

“Large hoards of coins, combined with initial promotional sale prices, almost always translate into lower prices down the road. For example, an extremely large hoard of 1908 “no motto” MS-65 & MS-66 $20 Saint Gaudens coins recently surfaced. Advertising claims about those coins, while technically true, are in fact deceptive. In some advertising, they talk about low population figures, then ignore and exclude the huge batch that PCGS and NGC recently graded and certified. Before purchasing, do your homework”!

Interview with Jacques Luben of The Platinum Guild

At the time of our interview with Mr. Jacques Luben in Summer 1998, he was the Executive Director of The Platinum Guild Intl.

IPA: What is The Platinum Guild?

LUBEN:We are a trade organization that seeks to educate and inform the public (including investors and collectors) about the benefits of getting involved in various aspects of the platinum market.

IPA: What is the demand picture for platinum?

LUBEN: On average, platinum demand has grown over 5% per year throughout the 1990s, and the growth is expected to remain strong, with new technologies such as platinum fuel cells on the horizon, and worldwide demand for platinum jewelry growing rapidly, especially in Asian countries.

IPA: Last year, the U.S. Mint began minting platinum legal tender coins for the first time in history. Have you been pleased with Platinum American Eagle sales to date?

LUBEN: Oh, we’ve been thrilled. When the Mint launched the uncirculated coins in September 1997, their goal was to sell 100,000 ounces of the business strike coins in the first twelve months. They reached that target in six months. Needless to say, everyone is very happy with the response from collectors and investors.

IPA: Do you expect platinum’s price to rise this year, and if so, why? LUBEN: Yes, platinum’s future is bright, and prices are expected to trend higher over time. I can think of about five trends right off the top of my head that will contribute to this solid growth. Not necessarily in order of importance, the factors are:
• Diminishing and unstable supply from Russia.
• Continued industrial demand growth in U.S. and China.
• Sustained strength in both investment and jewelry demand.
• Substitution away from palladium into platinum.
• Annual supply deficits with more projected.

These factors, plus emerging fuel cell technologies will keep platinum demand growing, and with tight supply side factors, platinum’s price should rise over time.

Interview with Mike Fuljenz: Booming Beanie Babies

IPA: How does the individual cash in on the Beanie Baby craze?

MIKE: You don’t! If you are collecting them for fun, buy the ones that you like, but just for fun. Don’t expect to retire on them five years from now. If your kids are going to play with them, they could be ruined as a collectible. Collect them for psychic income, fun and quality time with your kids. At my house, we go over the poems and history at night, and catalogue them. My son will learn early on how to enjoy a collectible market and how collectibles are handled, treated and catalogued. It teaches him the family business in a way that he wants to learn.

IPA: What prevents Ty, or any collectible manufacturer from making a whole bunch more “collectibles?”

MIKE: Well, that is a problem when you are not dealing with a reputable mint of collectibles, such as the United States Mint, which is limited to certain standards and production. Even that doesn’t prevent third world countries from re-striking coins valued at a hundred dollars. Do not invest in third world country low mintage coins. Even Mexico and China sometimes restrike popular issues. How much money do you want to pay the deputy director of the mint? They’ll pull out the die and strike one for you. Be careful! This concern with reissuance or restriking is one of the most significant reasons why the U.S. rare coin markets is the premier and safest collectible markets. Remember, there is no more developed or safe collectible market than rare coins. Independent grading and authentication by PCGS and NGC and their tamper resistant holders are unparalleled in any other collectible market.

Interview with Robert Leuver

Y2K and the Federal Reserve

IPA: How long does it take to replace all the notes in circulation?

LEUVER: About three years to roll over the whole supply. A one dollar bill lasts about 18 months, the larger denominations up to five years.

IPA: How much U.S. currency circulates worldwide?

LEUVER: About 70% of the higher denomination bills circulate outside the United States. Of course, nobody’s stashing one dollar bills under the mattress, those are $20, $50 and $100 bills. A large percentage of $100 bills are shipped overseas.

IPA: There seems to be a lot of concern right now about potential bank runs as a result of the Year 2000 computer problems. What would you recommend to individuals in terms of their monetary game plan?

LEUVER: Y2K now strikes at U.S. currency. The Fed has indicated that they expect a run on currency at the end of calendar year 1999, due to the Y2K problem. This is the first admission by a federal agency that the Y2K problem is serious – and possibly more pervasive than originally thought. Among other things individuals need to do to prepare, they should definitely be looking at the possibility of putting some of their money into gold, silver and platinum coins as a protective measure.

IPA: As always, it is a pleasure to visit with you. Any closing thoughts?

LEUVER:Yes, I would like your readers to know how much I have come to respect Mike Fuljenz over the course of the past decade. His strong leadership, input and support of the American Numismatic Association were instrumental in formulating ANA’s policies regarding the grading and authentication of coins, which is a testament to his commitment to the industry.



As the year 1998 ticked away, what had once been the obscure concern of computer programmers started becoming big news. A “bug” in computer programming code that potentially threatened to shut down the modern world may seem ridiculous in retrospect, but in 1998, everyone began talking about it, and the conversation only got louder as the millennium approached. So what exactly was the Y2K millennium bug all about?

In the early days of computing, storage space was very expensive, and every byte saved was a byte earned. To conserve space, programmers used only two digits for year designation, apparently creating a coding bug that could somehow at the stroke of midnight, January 1, 2000, set off a chain reaction of computer failures that would gridlock modern society and shut down the engine of the world. Computers – literally – wouldn’t know what day it was, and chaos would ensue. While January 1, 2000 came and went without too much of a challenge from the Y2K bug, the longest running bull stock market in history ended soon thereafter when the Dot.Com bubble burst. The crisis triggers rising prices for rare coins and precious metals, setting the stage for the fourth rare coins bull market cycle in the last thirty years.

In 1998, Mike Fuljenz began covering the Y2K story and picked up his second Numismatic Literary Guild Award for his newsletter. In Mike’s coverage, he saw the seeds of the rare coin bull market being planted, and informed his readers early.

Mike Fuljenz on CNBC with Ted David

Since 1991, CNBC-TV has called Mike Fuljenz over 20 times to analyze rare coin, precious metals and collectibles markets. During that time, Mike has appeared on Smart Money with Ken and Daria Dolan, Steals and Deals with Janice Lieberman, The Morning Show and Money Wheel with Sue Herrera, and Money Talk with Ted David. He has won six NLG awards for his appearances. The following is excerpted from a transcript of a live appearance on Money Talk with Ted David that took place in the fall of 1998.

TD: So, what are these new Platinum Eagle coins with the lighthouse design on the back about? These are new aren’t they?

MIKE: Well, they just went on sale a couple of weeks ago, and U.S. legal tender platinum coinage has only been in existence since last November 1997. They are reporting record sales.

TD: It makes a very nice presentation.

MIKE:Yes, it is really a great marketing effort by the Mint. Phil Diehl, the Director of the Mint, and his marketing director, David Pickens, have done some things the Mint has never done before.

[Caller named John from Mississippi]

JOHN: I am interested in collecting gold. Should I consider $20 American gold pieces, like Liberties, recent American gold commemoratives, or world gold coins like British Sovereigns?

MIKE: If you are planning to be in this country, I would recommend buying American gold like the Gold Eagles. Sales have tripled this year. In fact, since Black Monday in 1987, we have never had such high sales of gold and platinum in this country. Seems like more people are diversifying. If you believe, as I do, that we are in an up cycle, you might also diversify into Type II and Type III $20 Liberty Double Eagles, along with the Gold Eagles. If you’re going to be in Europe, buy the Sovereigns. They are very liquid over there, along with the Austrian Philharmonics.

Interview with Mike Fuljenz On Silver, Gold and Life Beyond Y2K

The Best Way To Own Silver

IPA: What is the best way to hold silver?

MIKE: In my opinion, it is the Silver American Eagle. With the weight and fineness stamped right on the coin’s face, it is the most widely reliable and recognizable measure of silver content available.

IPA: What about coins that contain less than an ounce, so called fractional silver coins?

MIKE: Well, in terms of silver, you would have to be buying pre-1965 silver coinage. I don’t necessarily recommend buying much silver. If you do, it makes sense to hold it in the one ounce Silver Eagles, versus the older silver coinage. I mean have you ever tried dragging around a bag of dimes, quarters and half dollars. At 60 pounds per bag, silver coins get awfully heavy and bulky. Additionally, it has been almost 35 years since most of the fractional silver coinage was minted for circulation. Hardly anyone remembers what the actual silver content is in these coins.

Which Gold Coins To Buy?

IPA: When you recommend “better grade” coins, are you referring to MS-64 coins or better?

MIKE: Not necessarily. “Better grade” becomes a relative term depending on the variety of coin you are considering. For example, in 18th century coinage, sometimes an AU-53 coin might be the best recommendation, especially earlier date coins in which it may be difficult, if not altogether impossible, to even find a coin in a better grade. In later years, higher grades are generally available, but even these recommendations may vary according to the specific years and mint marks.

I personally prefer the Type II Liberties struck between 1866 through 1876, and the Type III Liberties from 1877-1907. It is very hard to find any Type II Liberties in a grade above MS-62. I like to buy the highest grades possible. With some coins that may only be an MS-63. With others that may be common in MS-63, I want an MS-64 or MS-65. However, in an 1866-S $20 Liberty, an AU-58 is a great buy. The true objective I strive to achieve is to identify coins that are positioned for increasing demand, so as to add to a collection before prices rise.

There Is Life Beyond Y2K

IPA: So, regarding Y2K preparations, at the end of the day, you seem to be saying, be prepared for some disruption, but begin looking beyond for life after Y2K. Is that an accurate summation?

MIKE: Yes, I think so. Prudent and realistic preparations are important, but don’t go overboard and stop living your life. It’s like the story of the street hot dog vendor who served hot dogs every day in the same spot for over 10 years. Then, one day he was robbed. So, upon advice from counsel, in order to insure that he would never be robbed again, he built a brick wall around his hot dog stand. Within a month, he was out of business, because ease of access was lost and few knew he was there selling hot dogs. But, he was never robbed again.

So, the spirit of my recommendations is to inform yourself, be prepared and remain optimistic. And, whatever you do, do not allow anyone to scare you into any strategy or high priced report purchases, based purely on the crisis du jour bringing the world to an end. Remember, this is not the first crisis to threaten life as we know it, and I expect it won’t be the last

Tracking Rare Coin Bull Market Cycles

Jacques Luben: On Precious Metals In The New Millennium

At the time of this 1999 interview, Jacques Luben was the Executive Director of the Platinum Guild International (PGI). Prior to joining PGI, he created and directed the precious metals investment programs at Merrill Lynch and Dean Witter Reynolds.

IPA: What does the next decade look like for precious metals?

LUBEN: I believe the next ten years look terrific, because we are in the very early stages of a big cycle. I think that when we look back at this particular year, this will be a watershed, because this is the year when the central banks finally acknowledged the importance of gold and decided they weren’t going o dump gold reserves on the market forever, and also, this is the year when the stock market began to stumble and cool its heels. These and other fundamental forces will continue to put significant pressure on precious metals.

Excerpted from Interview with Mike Fuljenz On Added Value Customer Service

IPA: How does maintaining a large inventory of coins add value and benefit to your customers?

MIKE: One of the principal areas we focus our attention on is maintaining the integrity of our supplier relationships. We bill approximately $5 million dollars a month to our company, wholesale, as a dealer, and to individuals. At any given time, I maintain an inventory of about $2.5 million, which is about a two week supply. That is a large inventory compared to one of the largest sellers of coins in America that doesn’t like to keep an inventory. They basically order it upon demand.

IPA: You mean, “just in time” inventory like the grocery stores do now?

MIKE: Correct. You see, it takes carrying charges to keep what I do. However, by maintaining inventory as I do, I am able to purchase inventory at better prices, because I am not under the gun when I purchase. In the long run, this strategy saves money for me and my clients by having the inventory on hand. This way, my company is not under the pressure of buying out of the inventory of others when needed, which usually always means higher prices all around. An additional added value benefit to my customers is that I also receive priority treatment from my suppliers, and they give me first shot at new inventory. So, I get to pick the best and reject the rest. The upshot is, my rejects are often what other dealers offer.

Why You Should Act Now To Own The Rarest $20 Liberty!

Type II $20 Liberties are so rare only one collector in 1,000 can hope to own even one of these gold coins. These coins are twice as rare as Type I $20 Liberties by mintage, and ten times rarer than the Type III $20 Liberties in population reports. In fact, these coins are 100 times more rare than the popular $20 St. Gaudens in mint state condition.

Called “Type II” because this was the second $20 Liberty coin designed. Unlike the Type I $20 Liberties, these were the first $20 gold coins to carry the motto “In God we Trust.”

Type II $20 Liberties were minted only between 1866 and 1876. Then after only 11 years, the coin was again redesigned, making these the shortest series and thus the rarest of all $20 gold Liberties in premium grades.

Over 95% of Type II $20 Liberties were melted down, the highest destruction rate for any post-1850 series. The Type II $20 Liberties that remain, those that are premium quality, almost uncirculated and uncirculated are even harder to find.

There’s an old law of economics that says, “Supply creates its own demand.” The sudden increase in the supply of early Type I $20 Liberties [“P” mints recovered from the shipwrecked S.S. Brother Jonathon and “S” mints from the S.S. Central America] will create surprising and dramatic increase in demand for the more rare Type II $20 Liberty gold coins. There isn’t a similar hoard of either the Type II or Type III $20 Liberty gold coins, because by their time America was on the railroad system and railroads don’t sink! (The first trans-continental railroad began service in 1869.)

This is important because, as new collectors acquire the highly promoted Type I $20 Libs from the S.S. Brother Jonathon shipwreck hoard, they will naturally seek to own examples of Type II and Type III $20 Liberty Double Eagles to complete collections of all three “types” of $20 Liberty gold coins. Complete sets have been known to bring premiums upon future resale.

Having an understanding of market dynamics gives you the kind of advance signal you need to succeed. It’s like knowing exactly where a new interstate highway is going to be built a couple of years in advance, so you can buy up the prime real estate before prices rise.



During the Reagan years, Robert Leuver presided over the printing of U.S. paper currency as the Director of the Bureau of Engraving and Printing (BEP). After leaving the BEP, he was the Executive Director of the American Numismatic Association from 1988 to 1997.

IPA: In September [1999], gold put in its best performance ever, gaining $70 in eleven days.What were the prime factors that so sharply boosted gold’s price?

LEUVER: Primarily, it was macroeconomics affecting the European Union (EU). The most obvious trigger was the surprise announcement by the EU Central Bank to severely restrict future sales of their central gold reserves. A not so obvious factor to the casual observer is the long-term plan and drive by the EU to replace the dollar and establish the Euro as “the” currency of choice in international trade.

IPA: So you’re saying, when the EU Central Banks announced they would stop gold sales and lending, they were, in effect, attempting to strengthen the long-term perception of the Euro in order to market it internationally?

LEUVER: Precisely. Since January 1, 1999, the Euro has lost about 20% of its value. While this has been a short-term boon to EU trade, if the Euro remains this low in the long run, the Euro’s perception as a viable investment vehicle will be adversely effected. I believe the EU Central Bank suggested to the EU countries that they stop liquidating their gold reserves in order t bolster the perception of the relative strength of the Euro as an investment currency. You see, about 70% of all U.S. dollars circulate outside the U.S., furnishing about 63% of the world’s currency reserves. In short, the EU wants a piece of that action.

IPA: So the EU Central Bank’s September 26 moratorium announcement was the first shot in a currency war. In one corner is the U.S. dollar, backed by the Federal Reserve and the Treasury Department, and in the other corner is the Euro, backed by the EU Central Bank and all the EU nations?

LEUVER: Correct. There are two stories there, the effect on the price of gold and the unannounced “war” between the Federal Reserve and the Treasury on one side, and the EU Central Bank on the other. Good visiting with you again, Mike.

Myth #1: Hoard coins are a good “investment,” so you should purchase them as soon as they hit the market.

False! Based on historical performance, hoard coin prices and values often drop after the initial marketing concludes. The shipwrecks hoards of $20 gold pieces currently being marketed will probably prove no exception. You can check out the price histories of previous hoards, such as the early sixties government hoard of Morgan silver dollar bags, or the government sale of Carson City dollars in the late sixties, and just two years ago, the hoard of 1908 “no motto” Saint-Gaudens $20 gold coins. Prices were high for these coins when they first hit the market, and then eventually dropped after the marketing promotion ended.

Don’t get me wrong here! Hoard coins are neat, historical pieces to own, but usually you are better off not buy them for investment during their initial release to the public. Two years ago, I warned collectors and investors, along with the Silver & Gold Report, not to buy the 1908 “no motto” $20 Saints, which sold for nearly $3,000. Today, those same coins can be bought for $1,800 to $1,900. What’s the lesson? If you want to own a high population, hoard coin as an investment, typically you should wait a year or two, and then, you will probably buy them at lower prices.

On the other hand, if you come across a “one of a kind” or low population rarity that comes from a hoard source, you likely should take action, because you might not ever get another chance to add it to your collection. So, if you need one for fun, or to complete a collection, go for it! But, be careful of the price you pay, and why you are purchasing it.

Myth #2: It’s always best to buy the highest coin grade possible, so stick with gem coins, exclusively in grades MS-65, MS-66 or MS-67.

False! According to charts the CDN ran for me, during the 1990s, some of the worst performing sectors of the Coin Market Index were MS-65, MS-66 or MS-67 grade coins. Actually, dealers promoting these gem-grade coins don’t want you to know that silver and gold commemoratives, type coins and many gold coins, usually gem-grades, vastly underperformed the Coin Market Index. They are ignoring what happened during the years since certified, graded coins came on the market – the decade of the 1990s.

It may have been true in 1970s, or even part of the 80s, that “gem” coins outperformed the CMI. However, for most years since “slabbed” coins appeared, that has largely been false.

After a decade of failure, the dealers who promote that area should put things in a little better perspective.

Don’t get me wrong! I love “gem” coins. They’re gorgeous and their time will come again, but after ten years of failure, it’s time to say good-bye to these claims. No one area of the coin market is always the best. Popularity waxes and wanes over time. You must keep remembering that market trends change. Pandas, for example, were very popular in the 1980s. A one ounce 1982 Panda went from $350 to over $4,000. More dealers were selling Pandas and there were more Panda promotions. Today, nobody really cares. Very few dealers even sell them, and they are worth far less than $800. Even MS-65 and MS-66 Morgan Dollars and the $20 St. Gaudens have yet to achieve the price highs they enjoyed during the 1986-1990 bull market.

S.S. Central America: Red Alert Update

It’s been reported to me that sales of the 1857-S Type I $20 Liberties are going very well. After publishing the last issue, a very respected numismatic expert contacted me to relate that, in his opinion, the number of coins remaining on the bottom of the ocean comprise probably less than five percent of the total coins that originally sank along with the S.S. Central America, and further, he added that the number of coins originally recovered is far less than some experts have speculated.

As always, we continue to believe the S.S. Central America coins are wonderful collectible pieces that are required for any serious collection of United States coinage, but do not recommend them for large investment purchases at this time.

How the S.S. Central America Coin Hoard Effects the Market

Currently, the prices for many coin series, especially non-gold coins, are being depressed due to the sales of S.S. Central America coins. Why? Because collectors are selling off other rare coins to raise capital to purchase S.S. Central America coins. The net result is that many dealers’ inventories are temporarily swelling, especially with non-gold coins. Thus, the bid prices for these coins are being discounted sometimes severely. This is true even with certified gold coins like the $21/2 Indian Heads and $20 Liberties, which we handle. I believe this circumstance will correct itself within 6 to 12 months, and bid prices should rebound.

We conclude this Update with one final overall market comment. Dealers who supply other coins to the retailers of the S.S. Central America coins report to us a decline in their sales to these retailers. This impacts the business inventories of these suppliers, who are willing to give our company very favorable prices on many popular coins. If you collect rare non-gold or odd ball gold coins, now is an excellent time for you to utilize our negotiating strength to land you a favorable deal from dealers who are currently strapped for cash.

A Look Back At Rare Coin Charts Over The Last Decade

Over the years, the commonly espoused wisdom among coin dealers is that usually pre-1950 dated “gem” coins (i.e.; coins in grades of MS-64, MS-65, MS-66 or MS-67) are the best for price rises. Despite historical information not supporting the common wisdom, some dealers continue to contend that gem coins are always the best, simply by virtue of the fact they are gem coins.

In other words, some dealers sell gem coins solely on the basis that, as gem coins, they will always rise in price more so than other coin classes. However, as the charts included herein prove, this is simply not always true, especially over the past decade through the 1990s.

Since the emergence of independent coin grading and certification (PCGS and NGC), the price histories of the most important major gem coin areas prove this representation false more times than not. In fact, a thorough review of the coin prices over the past ten years reveals that prices for many prominent gem grade coin areas have risen less than the Coin Market Index (CMI), which is one of the coin industry’s major indices for tracking average coin market values. Conversely, many uncirculated coin areas that graded lower than “gem” grades actually rose in price more than many major gem grade areas.

Historically speaking, virtually all coin series and grades will wax and wane in popularity. Therefore, in order to make the best rare coin collecting decisions, it is important to be able to accurately see how prices for a particular coin series are currently doing, relative not only to its price history, but against the CMI as well.

Our belief is that virtually every coin series analyzed herein will once again have its day in the sun. However, in making your coin collecting decisions, it is imperative that you have accurate and objective information on which you can rely. For this reason, the price history charts of some of the most popular and important coin areas are included herein.

This proof area of the coin market was extremely popular and highly promoted during the seventies and eighties. Unfortunately, like the related mint state series, in the opinion of many industry leaders, the level of significant dealer and buyer participation has declined over the past ten years. In gem uncirculated grades (MS-64, MS-65 or MS-66), this series as a whole has substantially under performed against the average Coin Market Index (CMI) over the past decade. Any claims to the contrary are simply not supportable by the documented price history chart included herein.

Silver commemoratives are a neat series for collectors, and one of my personal favorite coin collectibles. The coins are splendid works of art commemorating wonderful stories and moments in history, and are wonderful family heirlooms. Unfortunately, in the opinion of many industry leaders, the level of significant dealer and buyer participation has declined over the past ten years. In gem uncirculated grades (MS-64, MS-65 or MS-66), this series as a whole has substantially under performed the average Coin Market Index (CMI) over the past decade.

Superb “gem” coins were extremely popular in the mid to late 1980’s after the emergence of PCGS and NGC.The 8 gold coins comprising this superb gem set are the $2 1/2 Indian, $5 Indian, $10 Indian, $20 St. Gaudens, $2 1/2 Liberty, $5 Liberty, $10 Liberty and $20 Liberty all in MS-67 condition. Unfortunately, the past decade has not been a good one for gold in general, and MS-67 gem gold type sets have not fared well either when compared to the Coin Market Index (CMI). In MS-67 gem uncirculated grade), this set substantially under performed the average Coin Market Index (CMI) over the past decade.

Gold Coins Are Still the Best Hedge Against the Next Major Market Downturn

Written by Adam Lass Publisher-Editor, Penny Stock Fortunes Agora Publications

When we published this article in March 2000, the U.S. bull market in stocks was in its record-breaking 107th month. Just how long could this “miracle” last? This was the question probed by Adam Lass in his article. The following is an excerpt of the original article.

Life is good. The market is up, unemployment is down and inflation is only a distant rumble. I wouldn’t blame you a bit if you decided to lie back and enjoy yourself a little. You know, take the kids on a vacation, maybe buy a new car, or a nice fur coat for the wife.

Of course, you’d be making a huge mistake, one that could leave you wide open for major losses the next time the market takes a dive. And as good as things are now, the one thing I can guarantee you for sure is that sooner or later, the market will drop.

Both the S&P 500 and the Dow Jones are currently showing dangerous formations that could easily lead to a severe revaluation, possibly wiping out millions of fat, happy investors. Even supposed smart guys like Warren Buffet have lost billions of dollars in this best of all possible markets.

Watch Your A**

Understand that I am not one of those doom and gloom types. I really do believe that the current prosperity is well deserved. So, go ahead and buy yourself a present. Just make sure it can do a little something to guard your assets. My toy of choice is rare gold coins. Now I’m not one of those crusty old timers moaning about how everything’s gone to hell since we lost the gold standard, and I don’t bury my coins in my backyard. But, in times when the equities market goes south, rare coins and precious metals are in favor.

Why Coins?

I have several good reasons why I like coins. First of all, I like gold coins for their beauty, history and lasting value. The weight in my hand and the luxuriant color tell me I’ve made it. The best part is that, unlike that fur or a new car, folks will be lining up to buy the coins when the market goes south.

Second, rare gold coins are more divisible and portable than gold “bricks,” and are a convenient, private and portable store of wealth. Not to mention, I can’t afford the gold bricks.

Finally, as rarities, the history of certain coins adds value to collectors and investors. However, beware! The sector is brimming with rip-off artists, bait-and-switch cons, and boiler room sales operations. That’s why you need a guy like Mike Fuljenz on your team.

The Pro’s Pro

Mike’s been rattling about the coin business for around thirty years. He put himself through college (cum laude at Southwestern Louisiana in chemistry and biology) dealing part-time at the regional coin shows as far back as 1972. He’s been an authenticator and grader for the American Numismatic Association, and Vice President at both the legendary Blanchard & Company, and at U.S. Coins, before starting his own company in 1994.

Over the years, Mike has made himself into one of the trade’s top experts, the guy the professionals turn to to settle disputes about valuation and practices. He’s a member of virtually every sanctioning body in the field and has received awards out the wazoo, including the American Numismatic Association’s prestigious Presidential Service Award in 1996, as well as a slew of awards for his TV and Radio consumer reporting and for his excellent newsletter.

He’s been a powerhouse when it comes to consumer protection, with regular appearances on WOR Radio’s Smart Money, CNBC’s Steals and Deals, Silver and Gold Report, USA Today and Dateline. Even the Illinois Attorney General, the Federal Trade Commission, U.S. Post Office and the U.S. Mint have all tapped him as a consultant for his incredible expertise and indisputable reputation.

Gut Call: “I Like Mike!”

None of this would mean a lot to me if I didn’t like the guy. Anyone can print a fancy brochure. But, I needed to know if Mike was for real.

How does he treat the clients that I send him? Does he have the stock available? Is he operating out of his garage, like so many of these coin guys? Could he explain his little corner of the world in plain English? So, I flew down to Houston, and then drove 80 miles out to Beaumont, Texas to check him out.

Here’s the word: this guy is the real thing! Universal Coin & Bullion is currently headquartered in a Bank One building. When they say they have coins waiting in the safe, they are talking bank vault. While I was there, Mike showed me the site where they will be building their own brand new custom office complex, which is right down the street from their current offices.

A Stand Up Guy

Mike is also a pillar in the Beaumont community, serving as a coach for youth soccer, Little League Baseball and President of Little Dribblers Basketball. I’ve met his wife and kids, and his partners (who all live on the same block in Beaumont). In fact, after two days of meetings, I realized I’d learned as much about Mike and Beaumont as I did about rare gold coins. And, as Mike would say, “that’s the really important stuff.”

Mike would be the first to warn you that these coins are not about to double overnight or anything like that. In fact, Mike would prefer you to get educated, before you plunk down so much as a nickel on coins. Mike believes the best customer is an educated one. So, he goes the extra mile in providing reliable information to his clients, which is one of the reasons the Numismatic Literary Guild continues to laud his work year after year.




As we prepare this issue to go to print, America still doesn’t know who will become its next President. However, regardless of who ultimately undertakes the Oath of Office in January, history indicates a “new president” usually ushers in higher coin prices and a post-election year bull market for coins.

In an article widely published in November 1991, entitled “Election Year Bull Market Phenomenon?,” Mike Fuljenz pointed out that the economic stimulus given to the economy during a Presidential election has produced rising coin markets in every election and post-election year since 1964.

We have already witnessed “rising prices” in several key rare coin market segments here in Election Year 2000. History indicates this trend is likely to continue throughout the post-election year 2001.

Most of what an incumbent, or even a lame duck administration, does to stimulate the economy is done purely for political expedience of the moment, or more plainly, to further personal or party election year interests. Further, most of the steps taken to “boost” the economy in an election season do not actually take effect until long after the election is history.

If history is a reliable indicator, 2001 should also see rising rare coin prices in a post-election year bull market for coins. In particular, we foresee significant price increases for Type III $20 Liberty Double Eagles and $21/2 Indian Head Gold. Prices are headed higher, so the sooner you act, the better your chances for saving money on your collection.

As you can determine from these historical headlines, regardless of which candidate becomes President, history points to the recurring trend of strong coin markets in every post-election year following a Presidential election. In prior times, the post-election year rare coin bull markets have produced higher prices for many collectors.

In looking through our archives to review what the rare coin markets have done in post-election years over the last four decades, we found the following to be true:

• In the worst years, rare coin markets still trended upward.

• In the best years, we saw full-fledged bull markets with record prices for investment grade rare coins.

The evidence for these strong markets comes from headlines pulled directly from back issues of coin market trade publications, dating all the way back to Summer 1965. For example:

Summer 1965 Winter 1969 Spring 1973 Summer 1977 Summer 1981 Winter 1985 Fall 1989 Spring 1993 Fall 1997

“Numerous Price Hikes In Active Market” “Buying Is On The Increase” “Prices Soar Across Entire Market” “Market Strong As ANA Convention Begins” “Further Plus Signs Reflect Brightening Market” “All Mint State Gold On Upside” “Market Sizzles As Plus Signs Outnumber Minuses Four to One” “Pay Attention! Fuljenz Hit A Grand Slam Last Year By Picking $21/2 Indians In Crystal Ball Survey” “Pittman Coins Command All-Star Prices (At Auction)”

The White Hot Type III $20 Liberty Double Eagles

In our last Red Alert Notification to you, we identified the Type III $20 Liberty Double Eagles as the next breakout segment of the rare coin market. Since that time, the Type III $20 Liberty market has indeed heated up, and is now perhaps the “hottest” market segment going today. Several factors are merging together to influence this rising market. Among these are the following current and developing events:

In August 2000, Mike Fuljenz’s book, Type III Double Eagles: 1877-1907 received a Book of the Year Award from the Numismatic Literary Guild, the largest organization of writers, editors and publishers in the industry.

As a result, one of the world’s largest “importer” of gold coins has decided to provide the book to its network of over 100,000 domestic and overseas dealers and private customers, in order to assist their focus on selling Type III $20 Liberties. They believe the book will “turbo-charge” sales and demand from their vast international network of clients.

They further believe that the thousands of S.S. Central America Type I $20 Liberty “hoard” coin buyers will, as a next step, look to Type III $20 Libs to complete their collections.

Personally, I have not seen this much activity in the Type III $20 Liberty markets since this series experienced four-fold price increases in 1988 and 1989, which happened to be an election and post-election year market. My personal forecast is that I expect Type III $20 Liberties to continue to move up in price for now, and throughout the post-election year.

The “New” Coin On The Block: $21/2 Indian Head Gold

As we go to press with the latest edition of our newsletter, I am in the final stages of proofing and editing my new book, a comprehensive analysis of $21/2 Indian Head gold coins.

Like the award-winning Type III Liberty Double Eagles book, I expect the book on $21/2 Indian Head gold coins to also compete for a Book of the Year Award, and to have a similar effect on the $21/2 Indian Head Gold coin market, which I believe is one of the most undervalued niches in the coin market today.

I expect the market’s response to $21/2 Indian Gold to rival the currently “white hot” excitement of the Type III $20 Liberty markets. When I last recommended the $21/2 Indian Gold series in 1992, many of these coins skyrocketed 140% or more in only 12 months! A January 1993 publication exclaimed, “Pay Attention! Fuljenz Hit A Grand Slam Last Year By Picking $21/2 Indians In My Crystal Ball Survey.”

The bottom line: Just like the Fram oil filter commercial says, you can buy these now, or wait and pay a lot more later. The choice is yours!

A Brief History of the American Eagle Coins

With The Stroke Of A Presidential Pen…

On April 4, 1933, many Americans were stunned by President Franklin Roosevelt’s signing of the infamous “Executive Order 6102.” With the stroke of his Presidential pen, Roosevelt “relieved” all U.S. citizens of their privately-held gold, with the exception of “rare collector coins.”

However, it was not until 1954 that the order was amended to define “collector” coins as those “minted” prior to April 5, 1933. By that time, millions of gold coins, many of which today would have substantial numismatic value, had been confiscated and melted down.

More than 50 years later, on December 17, 1985, President Reagan signed into law the Bullion Coin Act, which once again allowed legal tender American gold coins to be minted in .9167 fine gold.

The Gold American Eagles are minted in four denominations, including the first ever $25 American gold coin in history. The $5, $10, $25 and $50 Gold Eagles quickly took their place among the world’s leading gold coins.

Approximately six months later, a second law was passed authorizing the one ounce .999 fine Silver American Eagles to be minted. Both series of coins were declared by law to simultaneously be legal tender and numismatic making them an immediate success with collectors and investors alike.

The First Platinum Legal Tender …Ever!

Due to the huge success of the Gold and Silver American Eagle programs coupled with the increasing strategic importance of platinum, in 1996, the United States Congress signed into law the authorization for the United States Mint to produce the first legal tender, platinum coins ever minted by the United States government.

This was the first in a series of first for the history-making Platinum Eagles. Like the Gold Eagles, the Platinum Eagles came in four denominations, including $10, $25, $50 & the first $100 legal tender United States coin…ever!

In the law itself, another historical precedent was set. For the first time ever, the Secretary of the Treasury – and not Congress – was empowered to make all design, specification, varietal, quantity, denomination and inscription decisions in the minting of the Platinum Eagles. This provision significantly changed the history of law surrounding American coinage.

As America’s first official platinum legal tender coin, the Platinum American Eagles were an instant and huge success with investors and collectors. Coins disappeared from the market almost immediately, driving premiums for the coins instantly higher upon their release. With one of the lowest mintage track records in United States history, the Platinum Eagles are already rare among United States coins.

Fuljenz Extends NLG Award Winning Streak

At the Numismatic Literary Guild’s annual convention in August, Mike Fuljenz extended his NLG award-winning streak to 18 by picking up two new awards, one for his newsletter, and one for his book, A Collector’s Guide to Indian Head Quarter Eagles.

This is the fifth consecutive award for Mike’s newsletter, which is regularly lauded for its market coverage on rare coins and precious metals. Fuljenz’s award for his 2001 book, A Collector’s Guide to Indian Head Quarter Eagles marks the second year in a row that Fuljenz has netted a NLG award in the Book of the Year category.




 IPA: How are $20 Liberties trading?

MIKE: Type II and Type III $20 Liberties have taken an interim breather after a strong year 2000. However, a new book on Type I $20 Libs has collectors, investors and dealers buzzing. Rumor has it the new book will recommend collecting Type II and Type III $20 Libs to complement the Type I Libs. Therefore, the release of that book should stimulate the overall $20 Liberty market later this year, possibly adding on to last year’s price increases. There are still some excellent opportunities in these areas.

IPA: Which American Eagles have the best long-term appeal?

MIKE: There are several key factors that influence a specific coin’s long term appeal among collectors. For starters, coins that have original “low” mintages are prime candidates to develop future rarity status. Over time, many of these coins are circulated, damaged, converted to jewelry or otherwise debased. As the “surviving” mint state population dwindles, rarity increases and condition becomes increasingly important. Coins originally from low mintage issues, which are preserved in gem mint state condition, can command large premiums long-term.

Among the American Eagles, I expect certain key date, low mintage $25 Gold Eagles, along with the very low mintage $25 and $50 Platinum Eagles to be strong contenders as future rarities. Many of this lower mintage Gold and Platinum Eagles have already commanded substantial premiums during the brief history of the American Eagle program. This is a strong indicator for their longer term appeal.

IPA: Are there other factors that can enhance a coin’s long-term appeal?

MIKE: Absolutely! For example, a “special” circumstance surrounding a particular coin, such as first year or last year of issue, or a “key date” selection, such as beginning of the century, will oftentimes uniquely influence demand among collectors. If so, coins possessing this “unique” characteristic can develop significant premiums over and above their melt value.

IPA: Are the Roman numeral dated Gold Eagles special?

MIKE: Yes! The U.S. Mint only struck the “Roman” dates from 1986 through 1991. For collectors and investors, this created an attractive, short, and easy to complete set. The 1991 Gold Eagles have the additional distinction of being the “last year issue” before a design change, which also attracts collector premiums.

IPA: Why are Silver eagles so popular?

MIKE: Low price point, a beautiful classic design, and government guaranteed precious metals content merge to create a winning combination for an entry-level collector coin. Perfect for special moment and seasonal gift-giving.

IPA: What’s your “Final Five” all about?

MIKE: Over a decade ago, I began developing a “market maker” strategy for my rare coins operations. Through specialization and narrow focus, I have shown that it’s better to use a rifle than a shotgun when building a coin collection. By “specializing” in a limited number of areas (the rifle), instead of recommending the “whole Insider’s Guide Book” (the shotgun), we can more consistently provide reliable product availability and quality. Our “Final Five” currently recommends:

• Very Low Mintage Gem Gold and Platinum American Eagles
• Select Type II and Type III $20 Liberties
• Select Incuse $21/2 Indian Head Gold




Last week, I received a call from a long-time Oxford Club advisor Mike Fuljenz of Universal Coin. He wanted to discuss the fourth rare coin bull market in the last 35 years.

I’ll share what he said below. And from all indications, Mike’s logic seems right on target. Consider this…

In the last 30 years, there have been three complete rare coin bull markets: 1972-74, 1976-80 and 1987-89, and we are now in the early stages of the fourth. Each previous rare coin bull market cycle has been faithfully accompanied by a bear stock market, generally volatile oil prices and highly active interest rate changes. The current market is no exception.

The Increase in Number of Buyers for Precious Metals: Your Distant Early Buy Signal

As uncertainty grows, the number of buyers purchasing precious metals products dramatically increases. Metals prices can also rise in response to the increased demand; however, this not always the case. Still, even when metals prices remain stable the number of individuals actively purchasing precious metals can increase by as much as four-fold.

What happens next is that the influence of new buyers for precious metals products stimulates a similar increase in the number of active rare coin buyers within 6-9 months. This increased demand stimulus subsequently triggers price increases over the following three years. Past rare coin bull markets have seen prices increase as high as 348% to 1,195%.

The Coming Rare Coin Bull Market

Since President Bush took office, rates have dropped a record 10 times, evidencing the severe underlying economic uncertainty, which was in place before September 11. To stimulate the failing economy, rates have dropped to their lowest level since 1958. This is the clincher signal for the coming bull market in rare coins, as low interest rates tend to increase the number of buyers for precious metals and rare coins. Why? Because low interest rates remove incentive to keep money in lowyield CD’s and savings accounts.

Also, as Mike mentioned—every single rare coin bull market for the past 30 years has been presaged by an earlier dramatic increase in the number of buyers for precious metals products. Since September 11, metals dealers have reported a strong increase in the number of individuals purchasing precious metals products. And, as you can see in the table below, the affect on precious metals prices has been the exact inverse to the affect on the Dow. Precious metals prices have boomed, and will continue to do so.

In all probability, in the 6-9 months that will follow, this increase in the number of buyers for precious metals will stimulate a likely increase in the number of active buyers for rare coins, driving prices even higher.

And that’s where the opportunities are for Oxford Club members. By getting into rare coins today, before the bull is fully out of the barn, you’ll have an opportunity to ride the next wave of up to 1,195% returns.

For more information on how to profit from collectables during today’s turbulent market, see the Universal Coin insert enclosed with this report or contact Mike Fuljenz toll free at at (800) 459-2646 or (409) 866- 4112.

Strongest Rare Coin Bull Market Advisory In More Than A Decade

Reflections of Uncertainty

Major economic and political uncertainty tends to drive rare coin prices higher! In the last thirty years, there have three complete rare coin bull markets: 1972-1974, 1976-1980 and 1986-1990, and we are now in the early stages of the fourth. Each previous rare coin bull market cycle has been faithfully accompanied by a bear stock market, generally volatile oil prices and highly active interest rates. The current rare coin bull market is no exception.

Major economic and political uncertainty rises during extended periods of war, political scandal or terrorism. New presidential administrations, even second terms for popular presidents also historically stimulate uncertainty.

Winds of Uncertainty

These are most assuredly uncertain times, and uncertainty triggers a variety of economic events, which set the stage for a rare coin bull market. War, political scandal and terrorism create the greatest uncertainty, which is then reflected through key economic indicators, like highly active interest rates, volatile oil prices and a bear stock market.

The mere presence of economic or political uncertainty can stimulate an increase in the number of buyers for precious metals products. However, the prospect of uncertainty over a prolonged period of time virtually insures an increase in precious metals buyers, and that a rare coin bull market will subsequently appear. With the war on terrorism a reality for the foreseeable future, interest rates at their lowest levels since 1958, ongoing volatility in sensitive oil prices, and a confirmed bear stock market already underway, uncertainty will prevail indefinitely.

Mike Fuljenz stated, “The Kicker here is the presence of the lowest interest rates since 1958. Increasingly I am hearing from customers who are moving money out of low-yielding CDs and savings accounts, and purchasing metals and rare coins instead.”

There has already been a dramatic increase in the number of buyers for precious metals products, which will stimulate a like increase in the number of buyers for rare coins 6-9 months from now. With all the other economic indicators appearing to be settling in for the long term, we expect rare coin prices to be on the rise for the next three years.

Bull Rare Coin Market Evolutions

1972-1974

Uncertainties: Nixon Re-elected, Watergate Scandal Surfaces, Vietnam War Ends, Nixon Resigns, New President Ford, First Wave of OPEC Oil Price Increases, Bear Stock Market.
Stock Market: Down 45% (Worst Performance Since Great Depression)
Interest Rates: Highly Active, changed 9 times in 15 months, rising from 4.5%-8%.
Oil Prices: Rapidly quadruple from $3-$12 in wake of Yom Kippur War
Precious Metals Activity: Silver Up 250%, Platinum Up 20%, Number of Individuals Purchasing Precious Metals Dramatically Increases.
Rare Coin CU 3000 Index: Prices up 348%

1976-1980

Uncertainties: New President Carter Elected, Second Wave of OPEC Oil Price Increases, Iran-Iraq War, Iranian Hostage Crisis, Stagflation, Crisis of Confidence in President Carter’s Leadership, Bear Stock Market.
Stock Market: Down 27% by early 1978
Interest Rates: Highly Active, changed 23 times over 4 years, rising from 5.25% to climax at 18%
Oil Prices: Up more than double from $14 to $35 a barrel
Metals Activity: Gold Up 800%, Platinum Up 400% and Silver Up 2,300%, Number of Individuals Purchasing Precious Metals Dramatically Increases.
Rare Coin CU 3000 Index: Prices up 1,195%

1986-1990

Uncertainties: Iran Contra, Saving & Loan scandal, Black Monday, New President Bush Elected, Bear Stock Market.
Stock Market: Down 36% in 55 days “crash” climaxing on Black Monday October 1987
Interest Rates: Stable between 6-7% under new Chairman Greenspan’s control – only three rate changes.
Oil Prices: Slow, steady rise. Rapid spike doubles prices from $17-$34 after Iraq invades Kuwait in August 1990.
Metals Activity: Prices Stable. Number of individuals purchasing precious metals dramatically increases after Black Monday.
Rare Coin CU 3000 Index: Prices up 665%

2001-2005

Uncertainties: New President Bush Elected, Severe Recession, War on Terrorism and Bear Stock Market.
Stock Market: Down over 30% from early 2000 top. Sharpest drop after September 11 terrorist attacks.
Interest Rates: Highly active and falling. Rates dropped 10 times since Bush took office. At lowest levels since 1958.
Oil Prices: Almost triple from 1998 lows and spiked more than 20% immediately after September 11
Metals Activity: Prices strengthening. Number of individuals purchasing precious metals dramatically increases since September 11.
Rare Coin CU 3000 Index: Based on past bull markets, rare coin prices could begin increasing within 6-9 months, and could rise anywhere from 348% to as high as 1,195% by 2004!

8:45 AM: Hijacked American Airlines Flight 11, originally traveling from Boston to Los Angeles, crashes into the North Tower of the World Trade Center in New York City, killing 81 passengers and 11 crew members, and sets the North Tower ablaze. 9:03 AM: Hijacked United Airlines Flight 175, also originally traveling from Boston to Los Angles, crashes into the South Tower of the World Trade Center, killing 56 passengers and 9 crew members, and sets the South Tower ablaze. 9:30 AM: President Bush, speaking from Florida, announces America has suffered an “apparent terrorist attack.” 9:40 AM: For the first time in history, the FAA halts and suspends all airline traffic nationwide. 9:43 A.M: A third hijacked airliner, American Airlines Flight 77, en route from Washington D.C. to Los Angeles, crashes into the Pentagon, killing 58 passengers and 6 crew members. 10:05 AM: The South Tower of the World Trade Center collapses. Buried in the rubble are the precious metals vaults of Iron Mountain Depository, an official COMEX vault, containing over $200 million in silver, gold and platinum bullion bars and American Eagle coins. 10:10 AM: Hijacked United Airlines Flight 93 crashes Southeast of Pittsburgh. Reports later confirm passengers counterattacked the hijackers and led the plane to crash away from its intended target. 10:28 AM: The North Tower of the World Trade Center collapses. 10:45 AM: All Federal offices in Washington D.C. are evacuated and closed. 1:04 PM: Speaking from Barksdale AFB in Louisiana, President Bush reassures America that all security measures are being taken, and that the U.S. military is on high alert status worldwide. 5:20 PM: Building 7 in the WTC complex collapses. 8:30 PM: President Bush addresses the nation, saying the U.S. will make no distinction between terrorists and those governments who harbor them. America braces for war. Sept. 12: New York Mayor Rudolph Giuliani announces death toll at the World Trade Center could be over 5,000. Firefighters continue to battle fires in New York and Washington. Bush labels attacks “acts of war” and asks Congress to approve $20 billion in relief to help rebuild America. For the first time in its 52-year history, NATO invokes the “self-defense charter,” which states that an armed attack against one of the alliance members is an attack against all of them. Sept. 13: President Bush fights back tears while speaking to America, calling the “War on Terrorism” the first war of the 21st Century, and urges Americans to prepare for a long-term military campaign. The State Department identifies Osama Bin Laden as the “prime suspect” in the terrorist attacks. The FAA allows air travel to resume, though with much stricter security controls. Sept. 14: Bush visits Ground Zero and declares “national emergency.” Military calls 50,000 reservists to active duty. Justice Department names the 19 hijackers. Taliban officials vow “revenge,” if United States attacks Afghanistan. Sept. 15: Pakistan agrees to the full list of U.S. demands for access to Afghanistan. Sept. 18: Taliban leaders urge Muslims to engage in “holy war” on America if it attacks Afghanistan. Bush leads nation in moment of silence. Sept. 19: Pentagon dispatches combat aircraft to Persian Gulf. President Bush enlists global coalition to wage “war on terrorism”. Nov. 1: Under heavy security, two Brink’s armored vehicles transport $200 million in gold, platinum and silver recovered from an official COMEX vault at Iron Mountain Depository, buried beneath the rubble at the World Trade Center since the Sept. 11 terrorist strikes. Many of the recovered American Eagle coins are later certified by PCGS.

A Note From the Publisher The memory of the September 11 terrorist attacks will ring in our hearts and minds forever. Not since Pearl Harbor has a single event so dominated the attention of America's collective soul. In times such as these, collectors seek to preserve the memory of significant historical events with unique mementoes. Today, a wide range of Pearl Harbor collectibles, including stamps, posters, pins and medals, bearing the motto, "Remember Pearl Harbor," are worth hundreds, even thousands of dollars. On September 11, the crumbling World Trade Center towers buried the COMEX vaults at Iron Mountain Depository. Among other things, the vaults contained Year 2001 Platinum, Gold and Silver American Eagles. On November 1st, workers recovered these historic coins, still in Gem Brilliant Uncirculated condition. The prestigious Collector's Universe subsequently certified the "recovered" coins for authenticity, and sonically sealed them to preserve their condition and future value. Seizing the moment, collectors snapped up all the Platinum and Gold Eagles in record time. Only limited quantities of Silver Eagles remain. These historic coins are the essence of numismatics, and we are honored to have been selected as the distributor. We will be donating 12% of all Silver Eagle sales to a World Trade Center Memorial Fund. Put this newsletter with your coins so that your children and grandchildren “Will Never Forget.” Editor’s Note: We donated over a quarter million dollars to the official WTC Fund.

Epilogue:

According to the Associated Press, the final combined death toll for all events in the 9/11 terrorist attacks as of 3/15/02, is 3,018. This exceeds the 2,403 Americans killed at Pearl Harbor. The source of the Anthrax contaminated letters is still undetermined. In the wake of 9/11, unprecedented donations poured in from around the world to benefit the families of those who died in the tragedy. Across the country, firemen and policemen became universal symbols of heroism, courage and honor in the hearts of Americans.

A large cache of platinum, gold, and silver American Eagles was recovered from beneath the rubble at the World Trade Center site. Mike’s companies participated in the distribution of the recovered coins, which were certified by Collector’s Universe, parent company of PCGS. They completely sold out all of their inventory, like the certified Silver Eagle pictured to the right, and donated more than $250,000 to the official World Trade Center Memorial fund.

Today, in 2004, the hunt for Osama bin Laden continues.

Mike Fuljenz A Big Winner at 2002 NLG Awards

In August at the Numismatic Literary Guild Awards ceremony in New York, Mike Fuljenz came away a big winner. Receiving three new awards for his newsletter, books and article, Fuljenz extended his lifetime total of NLG Awards to twenty-two.

Bull Market Lead Indicator

Precious metals and rare coins are in the news again, and this time the media is calling our numismatic consultant, Mike Fuljenz.

On December 24, 2002, CNBC called Fuljenz to book an immediate appearance to discuss the rare coin and precious metals markets. Fuljenz Has made more than 25 appearances on CNBC over the past 13 years, and picked up six Numismatic Literary Guild TV Reporter of the Year Awards for his appearances along the way.

However, in all that time, CNBC has only called one other time to book an immediate appearance. And that was during the last rare coin bull market, which ended in 1990. CNBC even agreed to pay for a satellite feed from Mike’s hometown of Beaumont, Texas, instead of having Mike spend the time flying to New York.

For the last year and a half, Fuljenz has been telling everyone that we are in the midst of a new rare coin bull market cycle, he strongest in more than a decade, and the fourth in the last thirty years. Now, it seems everyone else, including the media, is catching on.

Viewers demand news that is hot, and right now, there is no hotter market than rare coins.



In terms of European currencies, the dollar is trending weaker. As the U.S. economy continues to sputter, and the unknown costs of the War on Terrorism continue to mount, the U.S. Treasury and the Federal Reserve have recently announced their intention to continue cranking up the Federal printing press to pump as many low interest rate dollars into the system as necessary to keep things running smoothly.

The net effect of this policy is the devaluation of every dollar already in circulation. When the dollar is devalued, it begins to weaken. Governments and investors who use the dollar as a reserve currency begin looking for alternative investments for wealth preservation.

Oftentimes, precious metals, like gold and platinum, are a first stop acquisition, which begins driving metals prices higher. As metals prices rise higher, increased publicity drives new customers and reactivates older customers in droves to purchase metals and rare coins spurring demand even higher.

Because the metals and rare coin market capitalizations are much smaller than equities market, a very small increase in demand has a dramatic impact on prices. For the rare coin segment, which is even smaller than the metals markets, the impact is even more dramatic. While the dollar may have had temporary upticks due primarily to war successes, until the U.S. economy recovers from recession and the uncertainty of the war on terror resides, the dollar should remain relatively weak, which should continue to benefit metals and rare coin prices.

Exclusive Q&A with LM

We caught up with nationally respected rare coin expert, LM, in Late Spring 2003, shortly after he had attended a 2003 coin expo, one of the largest rare coin conventions of the year. Here is an excerpt from our conversation.

IPA: You just returned from a 2003 coin expo. What did you hear and observe from the dealers and collectors in attendance?

LM: The first thing that stood out to me is the increased number of dealers in attendance. I have been attending for over twenty years, and normally there are about 30-50 dealers at the show who are willing to spend $1 million or more, and about 20-30 dealers who can spend $100,000 or more. This year, the big players are about the same, but there has been an explosive surge in the number of smaller dealers. I counted over 200 small dealers in attendance, the largest turnout I have ever witnessed, and all of them reported they cannot get enough inventory to satisfy demand.

Which Is Better Over Time: Rare Coins or Gold Stocks?

For investors, is it better to own physical gold, like rare gold coins, or purchase shares of stock in a gold mining company? You’ve probably heard the case for gold stocks. Now, consider the case why it is better to own some physical gold, especially rare certified coins. After considering both cases, buyers will be better prepared to make better informed decisions on the gold section of their portfolios or collections.

Gold coins have many benefits that gold stocks do not offer. There are also many risks involved with gold stocks that are not present with gold coins.

If you purchase stock in a gold company, you own nothing but a paper share of the equity in that company. As a result you assume all the normal risks inherent in owning paper equities, and, in the case of gold stocks, some additional risks specific to the gold-mining industry.

Gold Companies Are Vulnerable to These Issues:

• Executive Management
• Bad Accounting Practices
• Declining, Unstable Stock Market
• Falsified or Inaccurate Discovery and Reserve Projections
(See Grandich article on Bre-X fiasco from 1997)

Risks Inherent To Gold Mining Are:

• Labor Unrest
• Natural Disaster Vulnerability
• Unexpected High Mining Costs
• Profits Tied To Gold Spot Prices
• Profits Lost Due to Hedging Practices

Hostile Regime Changes

Add these specific challenges to the fundamental risks, and it is easy to see why owning gold stocks is not utopia, but at best, only a part of your overall gold purchasing strategy. For collectors, understanding these issues can be beneficial in understanding price trends in collectible coins.

Holding Gold In Your Hand

On the other hand, by owning physical gold, especially rare certified gold coins, you bypass most of these risks. Instead of a “paper share,” you own a physical, tangible asset that you hold.

While rare coin prices may, in some respects, be influenced by new clients responding to the spot price of gold, their numismatic nature also leads their long-term values to be influenced by factors independent of the market price for bullion gold alone.

In fact, once or twice a decade for the past 40 years, rare gold coins have outperformed every other class of investment available.

Long-Term Rare, Certified Coin Prices Bolstered By:

• Condition
• Rarity
• New, Rapidly Growing Collector Interest
• New Important Books

To top it all off, rare certified coins are infinitely more beautiful to look at than a piece of paper and have important historical significance, which in large part accounts for why a strong collector following supports rare gold coin prices, independent of the risks of gold stocks.

Owning Rare Gold Coins Places You In The Driver’s Seat

Holding rare gold coins, rather than paper shares, in your hand places you firmly in control of the wheel when it comes to your funds. Whether you are a collector or investor, it only makes sense to diversify risk.

Beware of Middlemen!

Middlemen, or even dealers, who are not “market makers” in the areas of coins purchased, typically pay 5-20% less than a market maker for the same coins. For example, I am not a specialist in rare coins like Lincoln Cents, 3 Cent Nickels or Standing Liberty Quarters. I would typically pay less for these coins than another dealer who specializes in those coin areas.

So, next time someone offers to buy your coins don’t be fooled by those who say they “pay you the most” and then sell the coins to another dealer who sell them to me! These are no specialists, and they are not market makers. They’re just middlemen in sheep’s clothing looking out for their interests and not yours.

Middlemen Aren’t The Highest Paying Dealers Or The Lowest Price Sellers

If you have been approached to sell your coins, before you take any action, you should carefully consider the following caveats:

• While some dealers or middlemen may advise you to “sell” your coins now, we say “buy and hold” our areas as prices are expected to trend higher for the next 2-3 years.

• Those who say, “sell into strength” often say so for their own benefit! It is in their best interest for you to sell now, not yours, otherwise they would not recommend it so universally!

• Make sure you are speaking directly with a “market maker” for the coins they are trying to convince you to sell. If they are not, then they are a “middleman” and you will likely receive less money for your coins when you sell and pay more when you buy, than you would with a market maker.

Exclusive Q&A with LM

We interview nationally known rare coin expert, LM, from time to time. At the time of this interview, the rare coin bull market was officially in the “boom” phase, so we checked in with him for his views on the market. Here is an excerpt.

IPA: When we last spoke, you had returned from the Spring Coin Expo, and now you have returned from the Fall Coin Expo. How did the two compare?

LM: Well, the most recent show continued to reflect the strong market conditions for rare coins. There were 2-3 times more buyers at the show than there were sellers, and the price of gold went up $10 during the show, so the atmosphere was very exciting.

IPA: How is the increased demand and competition effecting rare coin prices?

LM: As you know, the trend all year long has been many more buyers than sellers, and this broad competition is having an upward impact on prices, especially for key rare certified coins.

IPA: So you feel there is still some headroom in this bull market, and time to get in on the action before prices rise further?

LM:Yes, I do. There are still some areas of the coin market that are undervalued relative to everything that’s going on. For example, there are many $20 Libs and $21/2 Indians, particularly in MS-63, MS-64, MS-65 and MS-66, that I believe are extreme bargains right now, relative to other prices and their past peak levels. However, if the broad competition for these coins continues, and I believe it will, these will become scarce as well and prices will surge higher than most other areas of the market.

Mike Fuljenz Meets Tony Snow

Over the course of the past decade, Mike Fuljenz has had the opportunity to meet and interview many luminaries in the fields of precious metals, monetary policy and conservative politics. Many of those encounters have been documented in exclusive interviews, and chronicled in the pages of his award-winning newsletter.

Along with interviews with the likes of Robert Leuver, former head of the Bureau of Engraving & Printing under President Reagan; Jacques Luben, former Director of Platinum Guild International, we are proud to add to this esteemed roster, an exclusive interview with FOX News Sunday host and anchor, Tony Snow.

With more than twenty years of media experience under his belt, including stints with the Detroit News, USA Today and The Washington Times, Tony Snow’s national profile expanded greatly over the past six years, when he joined the FOX News Channel, and began anchoring many of the FOX News Channel’s weekend programs, including Weekend Live and FOX News Sunday. A most respected and esteemed journalist, Tony Snow has interviewed many national and international newsmakers including, Condoleeza Rice, Colin Powell, Donald Rumsfeld, Tom Ridge, Tom Daschle, and former Israeli Prime Minister, Benjamin Netanyahu.

Mike Fuljenz recently caught up with Tony Snow in Beaumont, Texas, when Snow was a featured speaker at Lamar University’s Academic Lecture Series. After Snow’s lecture, he spoke with Fuljenz on a range of issues, including the media’s “non-coverage” of certain events in Iraq, President Bush’s formidable leadership skills, and whether or not Hillary Clinton will run for President in 2004. Here are some excerpts from their conversation, and Mr. Snow’s presentation.

On Weapons of Mass Destruction in Iraq:

The key point the media continues to downplay, or ignore altogether, is that Saddam “himself ” was a weapon of mass destruction. He routinely brutalized and murdered more than a half million Iraqi citizens, while the United Nations ignored these human atrocities, yet there continues to be no substantial outcry through the media for these clear human rights violations.

On President Bush’s Leadership Skills:

I think President Bush is a formidable leader with sincere conviction and substance. His vision for America is as grand as the American experience itself.

On Hillary In 2004:

As a journalist, I think it’s a fun idea to toss around, but I don’t think she will run next year, because there are too many uncertainties out of her control, like the economy, that could positively effect Bush’s re-election. She won’t run unless she feels she is guaranteed the win. I think she will bide her time until 2008.

On the Importance of Family:

My professional life keeps me very busy, but sometimes you have to draw the line. I recently turned down a lucrative book deal, because it would have taken even more time away from family, and I’d rather spend my time watching my kids growing up, and attending their sports competitions. One day that opportunity will pass and I can’t recapture it. Hopefully, there’s always another book deal.

As a youth coach of baseball, soccer and basketball, and a father of two, Mike Fuljenz certainly feels a kindred spirit with Tony Snow on this last point.

Type III $20 Liberties and $21/2 Indians provide greater rarity factors compared to St. Gaudens for a relatively small price premium. While we like $21/2 Indians and Type III $20 Liberties in MS-63 and MS-64, our highest recommendation this month is to buy MS-65 and MS-66 specimens where the rarity factors are the greatest. Ask your account representative for a full analysis NOW, including pricing and availability, while limited inventory remains. Our last top pick, the 1911-D is up as much as 56% this year [See Chart B-Page 36]! So, don’t be a “dead rabbit”, slow mover on this one. As the Fram oil filter commercial says, “You can pay me now, or pay me a lot more later!” Type III $20 Libs and $21/2 Indians in MS-65 and MS- 66 are trading at 1/4 of their 1989 highs. Historically, price records in new bull markets exceed those reached in past bull markets. If history repeats itself, you could be paying us 4 times more for these coins in the next few years. Don’t be the “dead rabbit”, be a “fast rabbit!”

Why I Haven’t Recommended Saints in Over a Decade (Until Now?) Back in the 1980’s when I was the chief numismatist for what was then the largest coin retailer in the country, I handled numerous “bag quantities” of $20 St. Gaudens every year. I saw customers’ collections decrease in value virtually overnight when original bags dated 1908-D, 1909-D, 1909-S, 1914-S, 1915-S, and 1916-S were broken by us and dispersed on the market. More of some of these coins were submitted to grading services than had been submitted since the inception of those grading services. The 1909-D had the 4th lowest mintage of only 52,500 when I handled 1,000 original uncirculated coins. $20 St. Gaudens Hoards Remain In Multi-Bag Quantities After World War I, one of the main purposes of the $20 St. Gaudens was for balance of trade payments. European and South American countries were wary of paper currency due to the tremendous devaluation or ruination of their country’s currency. Lesser denomination gold coins took more time to inventory, thus were less favored for this purpose. To this day, bag quantities of $20 St. Gaudens remain waiting for the right opportunity to be dispersed. The massive multi-bag Wells Fargo hoard I wrote about a few years ago is another example. (We welcome you requesting this back-issue to check our prognostication accuracy.) Finally, in the past 20 years, I can count on two hands the number of $20 Liberty bags I have been involved in. Also, $20 Libs circulated and were melted to a much larger extent than $20 St. Gaudens. Compared to $20 St. Gaudens, the premiums one pays for $20 Liberties is scant considering their increased rarity and diminished hoard risk. The next time someone recommends $20 St. Gaudens to you, ask them how many bags they’ve handled and how many bags they know are hiding in strong hands.