Getting started in numismatics

Young or old, affluent or not, all sorts of people find coin collecting an accessible hobby. Many famous collectors started as children or young adults, and this is also the kind of hobby and vocation that gets passed to generations within families and shared with friends. Because studying numismatics also involves learning about history, politics, art and much more, this hobby has educational value. Of course, coin collectors also find this hobby exciting and sometimes, profitable. The first step for novice coin collectors usually includes learning the language of coin collecting. Special terms describe a coin's condition, type and appearance. Mastery of basic terms opens the door to gaining more knowledge.


collectionStart Your Collection

Learning coin terminology and acquiring basic collecting knowledge are important first steps for those entering the numismatic hobby.




historyCoin History

From the U.S. Mint’s first facilities, to the discovery of the Saddle Ridge Hoard, read about the historical places, people and events that have shaped numismatics.




metalsPrecious Metals

Bullion investing and coin collecting go hand in hand. Learn all about the basics of investing and the many different bullion coins available.




coinsKnow Your U.S. Coins

What’s so special about the Morgan dollar? How many different types of Lincoln cents have there been? Get familiar with all U.S. coins, past and present.



Making coins come alive

The very first American colonists had little need for coins in the wilderness. They bartered with trade goods, Native American wampumand tobacco. As civilization grew, the British did not always give the Americans permission to mint their own coins, but the colonists found alternative sources of coins and on occasion, struck coins without royal authority. For example, the Massachusetts Bay Colony set up its own mint in Boston in 1652 during a period when England lacked a king and continued striking 1652-dated silver coins for decades. Thus, early examples of U.S. Colonial coins were born. In April of 1792, the U.S. Mint was established in Philadelphia, the nation's capital at the time.

Numismatics, the studying of coins, and the collecting of coins both stand apart from investing in coins for their bullion value. Still, the bullion value of most collectible coins still needs to get considered. Even today, the U.S. Mint and mints of other nations’ produce bullion coins that are different from regular coins intended for currency. Through much of history, coins derived most of their value from their metal content. While people used coins as currency for thousands of years, the practice might have been closer to trading small bits of copper, silver, gold and other precious metals. However, as gold and silver rose in value, the intrinsic worth of the precious metals in the coins began to exceed their face value. In the U.S., for example, the replacement of 90 percent silver coins with base metal coins began in 1965.

Learning about U.S. coins means learning about the history of the country. Very often, decisions about a coin's content, value and design were made because of political, economic or social events of the time that they were minted. In some cases, political figures or mint executives even made decisions because of favoritism, nepotism or personal competitions — and learning these details makes old coins come alive.


1970s leads to devalued dollar, high gold values

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The economic crisis in the United States worsened as the balance of payments deficit persisted. Therefore, on Aug. 16, 1971, President Nixon anĀ­nounced the United States was freeing the dollar for devaluation against other currencies by suspending the full convertibility of foreign-held dollars into gold. This inconvertibility meant no foreign government could convert dollars into Treasury-held gold; thus, the tie between the dollar and gold was severed.

The devaluation of the dollar occurred Dec. 18, 1971, and was accomplished by raising the official price of gold from $35 to $38 an ounce. Other currencies were juggled up or down into a new pattern of exchange rates. Throughout 1972 the price of gold on the free market climbed until it leveled off in December at $61 an ounce.

MORE:'s precious metals basics

Economists and monetary authorities almost unanimously regarded the 8.57 percent devaluation of the dollar as inadequate. And, since the dollar was no longer exchangeable for gold, it made little difference that the price at which the Treasury did not sell gold was raised from $35 to $38 an ounce. Another devaluation was forced, then, in February 1973. Treasury Secretary George Shultz announced that the dollar would be devalued 10 percent against SDRs (and so against gold) with the official monetary price of gold raised from $38 to $42.22 an ounce.

The price of gold on the London market took a sharp leap upward, breaking through the $100 an ounce barrier on May 14, 1973. Official stocks of gold were virtually frozen because no central bank would give up gold at the official price of $42.22 an ounce when the free market price had climbed so far above it.

The above is an excerpt from the eighth edition of the Coin World Almanac, published by Amos Media Company in 2011.

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