Don't Mint Everything to Demand
November 23 issue two items caught my interest: an open letter to the Mint from
numismatist Bill Fivaz, and a guest commentary by Alan Hepler on the Mint’s
Mr. Fivaz’s letter, I heartily agree with his suggestion for an advisory panel
of dealers and advanced collectors, and I would suggest including more than two
representatives from each group.
As for his
other suggestion to “produce to demand” all products the Mint issues, I do not
think this would be appropriate for everything the Mint produces.
products are already handled this way, and that works well for those items. Even many coins and sets that technically
have maximum mintages are in practice produced in batches based on estimated
demand such as the $10 First Spouse gold coins.
everything to demand would likely destroy the secondary value of many Mint
products, especially those made of precious metals. This has already largely happened for modern commemorative
coins, which in many cases can be purchased less expensively than their release
price after they are no longer available from the Mint.
In 2012 and
2013 the Mint used this approach with the San Francisco and West Point Mint
anniversary sets. It did ensure a wide
distribution of the coins, which is helpful, but apart from high grade
examples, these coins have not done well in the aftermarket. They are still nice sets, to be sure, but
many collectors indicated afterwards that they wanted to see limited issue
coins again and that in these cases the approach did not work well because of
extensive shipping delays. Many buyers
saw dealers with large supplies of graded coins long before their orders
shipped even if they ordered early.
though they ended up with final mintages that were lower than the 2006 20th
anniversary Silver eagle set, which had a limited mintage of 250,000 sets and a
household limit of 10 sets, the 2006 set has performed much better than the
2012 and 2013 sets. That may be partly
because the 2006 set had the first reverse proof coin in the series, but the
limited mintage was certainly important too.
And collectors had ample opportunity to purchase the 2006 set, a month
To be clear,
the Mint was not created to enable individuals and dealers to enrich themselves
from modern low mintage coins, but if there were no limited mintage issues,
this would harm the overall coin market and hobby and drive people away from
this important segment of numismatics.
that buyers expect everything they buy to be a secondary market winner because
of limited mintages and high demand.
Rather, collectors of modern coins, like all collectors, mainly don’t
want everything they buy to be so common than it decreases in value.
And as I
will discuss in part two, ordering these low mintage/high demand items in
recent years has not been nearly as bad as it is often portrayed based on my
own experiences and that of many collectors I know.