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The Origins Of Gold And Platinum

Thu, 10 Sep 2020 02:31:51 GMT

How Did Gold And Silver Become So Valuable?

There have been some truly astounding discoveries made recently advancing the field of Cosmology (the study of the origins of the universe), adding to the body of our scientific knowledge, and uncovering some of the inner working of the universe. As it turns out, it took space exploration to uncover the origins of Gold and Platinum.

Images provided to the scientific community, (now available to everyone via the internet) by HST, the Hubble Space Telescope , are greatly advancing our understanding of the formation of the universe. Launched in 1990 and orbiting 400 miles above the Earth the telescope's view is not impeded by the miles of atmosphere, light must pass through to get to any Earth based telescopes. HST no doubt will go down in history as one of NASA's greatest accomplishments. Its inauspicious beginnings, when faulty manufacturing left the main lens out of focus, were eventually corrected by shuttle missions in 1993 and 1999 in the most ambitious repair missions ever attempted in space. Since the successful visit from the optometrist, HST has provided astounding detailed images farther back in time than we have ever seen. HST also focused on the formation of stars and galaxies and it is in stars that gold is formed not here on Earth.

Observing stars is certainly nothing new, studying and theorizing about their origins has been going on since the Stone Age, but until the days of Nicolas Copernicus (1473-1543) who realized the Earth could not be the center of the Solar System and the planets had to be orbiting the sun, little was understood about a star's true nature.

It took advancements in our understanding of gravity before stars began to reveal their secrets. Isaac Newton (1642-1727) would advance our grasp on how stars work with the first theories of Gravity and provide a mathematical framework that would last intact until Einstein himself provided the next revisions with the General Theory of Relativity in 1915. Gravity is the key to understanding stars. A violent raging battle between gravity's attempt to crush a star, and the nuclear power trying to blow it apart, are what keep a star burning for billions of years.

It turns out that stars have life cycles, that is they are born, they live and they die. Our local star, the sun, is a small star as stars go. It is a second-generation star having lived at least once before previously having exploded and reformed. It is in the way that stars die that we have come to understand the origins of gold and platinum.

Stars are huge masses of hydrogen gas being crushed by gravity. Our sun is big enough to hold millions of Earths and burns over 600 million tons of hydrogen every second turning it into helium and releasing enormous amounts of energy in the process. It has been doing this for 4.5 Billion years. Four hydrogen atoms smashed together to produce one helium atom that weighs slightly less than the 4 hydrogen atoms that made it. The leftover mass gets converted into energy in the forms of heat, radiation and light at the rate of Einstein's famous equation E=MC2. Where E is the amount of energy released from the mass M multiplied by C squared where C is the speed of light (186,000 miles per sec). Since the speed of light is such a large number it is easy to see how much energy is released when even the smallest amounts of mass are converted into energy.

When a star begins to run out of nuclear fuel, gravity ultimately begins to win the battle. As stars burn through their hydrogen, gravity begins to crush down the mass of the stars, which getting hotter, fight back by burning progressively heavier elements in a desperate attempt to keep their nuclear fires lit.

How a particular star dies depends upon its mass. Stars are given weight by using our sun as a standard one solar mass star. A star twice the mass of our sun is said to be a 2 solar mass star. The brilliant Nobel Laureate, Subramanyan Chandrasekhar (1910-1995) for whom the Chandra space telescope (which views the sun in ultraviolet and gamma wavelengths) is named, established the exact mathematics describing the end of stars and their masses.

Our sun, again being a small star, will die first as a red giant engulfing the inner planets before being crushed into a remnant star called a white dwarf. Stars of 1.4 solar masses or more will become neutron stars weighing millions of times the mass of our sun but only being about as big as a large city. Neutron stars are so dense they compress the spaces between neutrons so tightly that one spoonful of a neutron star would weigh hundreds of millions of tons! These neutron stars have a tendency to spin rapidly some clocked at 100's of rotations per second creating energy waves that radiate out into space and are referred to as pulsars.

It is the really massive stars that are also the most violent when they die. Stars of 10 solar masses or more once they have exploded, crush so much mass into so little space, that they actually bend the space and time around them so dramatically that nothing can escape their gravitational pull not even light which is why they are called Black Holes .

When these very massive stars finally end their lives, they do so in an enormous explosion of mass and energy that can be seen across the galaxy. These are the supernovas. It is in the death of these stars with sufficient mass to burn high enough up the periodic chart of elements, that gold and platinum are formed and then blasted out into space when the star explodes. The supernova that occurred during the time of the formation of the Earth deposited the gold now found on our planet. All the gold found on Earth is over 4.5 Billion years old.

Unlike diamonds or oil, which are made terrestrially and are made of other elements, gold is a basic element on the periodic chart. No additional gold will ever be created on Earth itself. Gold is truly extraterrestrial . For any new gold or platinum to be created, a couple of neutron stars would have to collide or another supernova size explosion would have to occur in our galactic neighborhood (another stretch since the distance to even the nearest star is trillions of miles away (4.3 light years).

The Incas weren’t far off when they referred to gold as "tears of the sun". Gold has been used for thousands of years on Earth as a monetary base. It has been crafted into art, jewelry and coins and has always carried the mystique of Ancient Kings.

Now even more so than any time in history, we should truly treasure these remarkable precious metals and thank the stars for giving us these lasting gems of cosmic beauty.

Fit For A King

Wed, 15 Jul 2020 02:40:24 GMT

The Palace Collection Of 1954

Owing to a financial bankruptcy, which is well documented in other issues of this publication, on April 5th, 1933, President Franklin D. Roosevelt outlawed the private ownership of Gold in the United States. Americans were prohibited from owning more than $100 in gold coins . All gold money was to be turned over to the privately owned Federal Reserve Banks.

On this April day, the U.S mint had on hand $20 gold pieces dated 1933. They were ordered melted. A few, however, had made it out of the mint in, shall we say, less than standard channels. These were quickly recalled to be melted. Those that remained in private hands were deemed contraband and seized by the Secret Service. Nine specimens were accounted for in this fashion. One coin that remained was in possession of the Royal Legation of Egypt. The strategic importance of the region made King Farouk of Egypt, one of the most heavily courted Monarchs by the U.S. State Department. What Farouk wanted, he got, and Farouk was a world-class coin collector. The U. S. government issued him an export license for a coin that was illegal for Americans to own.

By 1953, a military coup resulted in the ouster of King Farouk. A great deal of his property was "seized" in the name of the people. Farouk sought refuge in Monaco. Unfortunately, his coins remained in Egypt as the property of the people. The new regime decided to auction the entire collection. Very well referenced and attended, it was known as the " Palace Collection" of 1954 .

Although it was held in Egypt, the cream of America's numismatic community was represented there. Much to the horror of the U.S. government, a coin that was illegal for these Americans to own, the 1933 double eagle, was scheduled for auction in the Sotheby's sale. Applying considerable pressure for sure, the coin was withdrawn at the request of the State Department, thereby avoiding the rather embarrassing disclosure concerning the legality of this coin. It was assumed in the numismatic community that the "illegal" coin was turned over to the U.S. government. There was, however, no evidence that the coin ever returned to the United States. That is, not until British dealer Stephen C. Fenton, owner of Knightsbridge Coins in London, was arrested in a New York hotel in 1996.

Fenton, a world-class numismatist, was the chairman of the British Numismatic Association, a dealer for 32 years and a life member of the American Numismatic Association. Fenton told a fantastic story. He had been buying coins from the family of a retired Egyptian Colonel. Fenton had obtained over 100 Farouk coins in several private treaty sales. Included in these transactions was the legendary 1933 $20, and its export license. Fenton brought the coin to New York City and was arrested trying to sell it for $1.5 million, to undercover Secret Service agents.

The coin and Fenton became embroiled in a five-year legal battle, followed closely by many observers. Just days before the trial was to begin, a settlement was reached. The 1933 double eagle will go to auction, with the proceeds split evenly between Fenton and the government. This settlement effectively transfers the King's license. All other 1933 double eagles will still be subject to forfeiture. Based on our awareness of the numismatic market, we predict that the price for acquiring this coin could dwarf the $4.14 million paid in August 1999, an 1804 dollar, one of eight. As the only 1933 $20 available, it truly is a coin fit for a King.

How Rare Is Rare?

Tue, 14 Jul 2020 00:54:27 GMT

What Does It Mean If A Coin Is Rare?

In practice, "rare" is a relative term whose interpretation varies when applied to different series. For example, consider the original mintages and estimated surviving specimens of 1893-S Morgan dollars and 1872-CC Seated Liberty dollars. The mintage for the 1893-S is 100,000, of which 6,100 to 12,200 survive; the mintage for the 1872-CC is 3,150, with 150 to 200 survivors. Yet, the 1893-S frequently is referred to as rare in advertisements, while the 1872-CC is not. For instance, examples of each were included in the John F. Rindge and Alan J. Harlan collections auctioned by Bowers & Merena Galleries in December 2003. The description of Lot 2279 reads in part, "1893-S VF-30 (NGC). Another circulated example of this rare date" [emphasis added]. Lot 2043 is an 1872-CC dollar described as "scarce," not rare, even though it is much more challenging to locate.

In the September 25, 2003, Orleans Sale, held by Kingswood Coin Auctions, Lot 603, is called an "1893-S VG8 (NGC). A moderate grade for this rare date" [emphasis added]. However, in Kingswood's August 8, 2002, Jackson Sale, Lot 1636, is an "1872-CC VF30 (PCGS) ... a handsome example of this scarce issue" [emphasis added]. Certainly, "rare" is not used in all auction descriptions or advertising text for the 1893-S dollar. In many cases, it is termed scarce or a key date in the Morgan series. The 1872-CC dollar sometimes is listed as rare or as a rarity in the series. The inconsistency shows the lack of a fixed numismatic definition. Auction catalogs are wonderful products that provide history, pedigrees, and descriptions. Many catalogs belong on the shelf of every serious numismatist's library. However, some published material is, by necessity, subjective in nature. A potential buyer considering a lot offered as 'A stunning rainbow toned coin!" might find the toning to be quite ugly. Such descriptions simply are a matter of individual taste, and toning falls into that category. Are the terms rare and scarce, likewise subjective?

Are any coins truly rare by objective measures? Do we use the term to describe a coin with lower than average mintage ... or lower than expected survival rate? Should there be a more objective, precise definition?

Puffery vs Solid Information

It is rather easy for collectors to think of the key dates of a coin series as rare, especially when looking at the classic types of the early to mid-20th century. However, a critical date that is more highly prized in the marketplace isn't necessarily rare. Take the Eisenhower dollar series. It could be argued that the key date is the 1973-S silver proof (the "brown box" coin). It is silver, it once skyrocketed in value to well above $100, and it has the lowest mintage in the series. But, does anyone really consider this coin, with a mintage of more than a million, as rare? Probably not, but 100 years from now, perhaps it will be described as such.

The words "Rare Coins" are included in the names of many numismatic businesses because the object of any enterprise is to attract the consumer's attention. Exaggeration and puffery in advertising are not only perfectly legal but also expected. If we do not have a clear numismatic definition of a term, then its use in advertising falls into the area of puffery. But if "rare" is applied when tens of thousands of examples are available to the public, we must be skeptical, just as we are of adjectives such as "new," "improved," "stronger" or "brighter" in ads for everyday household products.

What Is Rarity?

Many rarity scales have been devised for specific coin series or other areas of numismatics. One of the best known is the Sheldon Scale developed initially for early large cent varieties. Other rarity scales have been applied to Capped Bust half dollars, Civil War tokens, patterns, errors, and chopmarked coins; author/researcher Q. David Bowers developed a Universal Rarity Scale. Although this list is not all-inclusive, it is helpful to compare their similarities and examine their differences in finding where to draw the rarity line.

Since a number of rarity scales grew out of the Sheldon version, they are similar in many respects. Most do not recognize an item as rare until 100 or fewer pieces are known. However, Alan Herbert uses 1,000 or less, while for Civil War tokens, this cutoff point is 20 or less. Much of the difference stems from the number of enthusiasts in a given field. Since there are fewer collectors of Civil War tokens than of early large cents or Capped Bust half dollars, the scale for Civil War tokens has a lower point for terming a piece rare. But what happens if there is an upsurge of interest in Civil War tokens? Should the rarity scale be revised even though the number of tokens has not changed? Or should we be concerned only with absolute numbers known?

Absolute vs Condition Rarity

Although we have examined "rare" in an absolute sense and have not drawn a line in the sand, we certainly can see that if more than 1,000 examples of an item are available, then it generally is not considered rare. However, we must address "condition" or "grade" rarity when very few examples of an item exist above a certain grade, while it clearly is common in lower grades. Condition rarity usually is reflected in extremely large price increases from one grade to the next. Condition rarity certainly exists. Look at the 1896-0 dollar . It has a mintage of 4,900,000, and it is quite common in circulated grades. However, fewer than ten specimens are estimated to exist in Mint State (MS)-65 or higher condition. It is listed in the December 2003 Coin Values at $25 in Extremely Fine-40, $7,250 in MS-63, $45,000 in MS-64 and $165,000 in MS- 65. As you can see, large spreads in value can be based on very small differences in perceived quality.

Be cautious if you venture into the area of condition rarity. For example, a hoard containing high-quality examples could appear on the market. Another often overlooked but much more likely risk is that the MS-65 you purchase today will be valued only as an MS-63 or MS-64 in a different market cycle. Regardless of third-party grading's influence on the numismatic marketplace, grading remains much more an art than a science. Five experts might agree today that a coin is MS-65, but tomorrow the same group might see it as MS-64. This can make a tremendous difference in the value of the grade rarity you purchase.

Another concern with grade rarity relates to more modern issues. We have a reasonably good handle on the number of high-grade examples of 1896-0 Morgan dollars, but what about Proof (PR)-70 1963 Lincoln cents? Clearly, the cent is a common coin, and a particularly nice example might be worth $5. Yet, recently a PR-70 example sold for more than $30,000! The bottom line is a coin is worth exactly what a knowledgeable buyer is willing to pay for it from an equally knowledgeable seller. Perhaps $30,000 is the correct market value for this coin. But what if we could examine all 1963 Lincoln cents that have never been considered for third-party grading? If we found additional PR-70 coins, would their value be the Coins such as the 1916-D Mercury dime and 1909-S VDB Lincoln cent probably should be called "scarce." same? Not likely. Ultimately, you have to ask yourself whether you are willing to spend large sums for what is currently known as the highest-grade coins or if you are satisfied with a coin a grade or two lower with significant eye appeal, costing a fraction of the grade rarity.

Rarity vs Value

I suggest that rarity should stand on its own and not necessarily relate to value or price. If you have a unique numismatic item, you certainly have a rarity. However, it is not necessarily valuable. Value is a function of condition, demand, and how many exist. For example, examine the 1914-S Barber quarter and the 1916-D Mercury dime. They each have a mintage of 264,000 pieces and were made at essentially the same time. Yet, according to the 2004 edition of the "Red Book" (A Guidebook of United States Coins), in EF-40, the 1916-D dime is valued at $2,500 and the 1914-S quarter at $375. Or compare the 1913 Barber quarter and the 1909-S VDB Lincoln cent. The quarter has a mintage of 484,613, the cent 484,000; yet in Very Fine (VF)-20, the cent is listed at $625 and the quarter at $140. Clearly, value is not directly related to absolute rarity; consumers determine it. The 1916-D Mercury dime is valued more highly than the 1914-S Barber quarter dollar with the same mintage. If the number of Barber quarter collectors increases significantly, then we could expect to see prices rise for dates such as the 1914-S. On the other hand, if no new collectors enter the hobby or if novices are interested in different series, then it is entirely possible that prices will decline for "rare" dates such as the 1916-D. I am not trying to frighten anyone away from collecting a particular coin series, such as Mercury dimes. In fact, I believe they are beautiful coins and make a wonderful collection.

I am trying to point out that these coins are not really "rare" and that without a significant collector base, their price would necessarily drop. Look around any medium- or large-size convention, and you will find many examples of the 1916-D dime, 1909-S VDB cent, and 1921 Walking Liberty half dollar offered for sale. If we define "rare" as does Webster's New Collegiate Dictionary ("seldom occurring or found"), then none of these coins fit the description. Or take my earlier 1893-S Morgan dollar example-five specimens recently were offered in the same auction! How rare can they be with that many examples up for sale at one time? But try to find a 1817/4 Capped Bust half dollar , and you will discover a truly rare coin!

Standardizing the term "rare" in the hobby would, in effect, provide many of the same benefits that have come from the standardization of grading. Yes, grading is controversial and not "precise," but the standards in place today certainly serve the collector better than the "anything goes" atmosphere that existed in the past.

Where do we draw the rarity line? I am perfectly willing to see this issue debated and then have a consensus of the collecting community decide. Should it be less than 100 known? Less than 500? Less than 1,000? If we define "rare" as "seldom found," we can't go much above 1,000 and should stay below it.

If the term "rare" is to have any real meaning, then most of us, by definition, collect "common" and "scarce" coins. While that may be troubling to collectors who thought they were assembling a set of "rare" coins, upon reflection, it should be a source of comfort. After all, if the supply of an item is insufficient, then it is impossible to generate interest in it. Collecting common or scarce coins provides enough supply to feed demand, and demand produces new generations of collectors.

Ideally, assembling a collection should be challenging, but not impossible. If we looked only for that "rare" item, we would be quite frustrated. Instead, common and possibly scarce coins provide us pleasure and relaxation. So celebrate them as an important part of our hobby. Recognize that while it is genuinely wonderful to fantasize about rare coins, we will never be able to own very many of them.

Gold Bullion Bars vs Rare Gold Coins

penni@tandette.com — Mon, 04 May 2020 21:19:10 GMT

Which Is Better Gold Bars Or Bullion?

If you are considering including gold in your investment portfolio, you may be wondering which is better, gold bars or gold coins. This is a dilemma, which is a personal decision, but the following information about the difference between gold bars VS gold coins may help you to make a more informed decision.

Let's begin with gold bars. For a serious gold investor, it would be efficient and straightforward to invest in larger gold bars, which generally have the lowest premiums above the actual value of the gold. The smaller bars usually have a higher premium. If you add all those higher premiums together, you can see that the larger bar might be more economical than purchasing several small bars, but let's consider some of the trade-offs of buying the large gold bars.

Impossible to Liquidate

The larger gold bars are not very flexible when you are ready to sell them. If you only want to sell off a portion of your gold bar, it is not very practical to shave off the end of the bar and then sell it; you would have to sell the whole thing. Another consideration is the buyer. It is not likely you could find an individual willing to purchase an entire large gold bar. You would have to find a larger dealer, which means you would get the value of the gold less the dealer's profit margin. There may also be some considerations having to do with storage and protection.

When you look at gold coins, you may even want to try thinking of the one-ounce bullion coins as the equivalent of a one-ounce bar. This shows you how flexible you can be with the coins. The mass-produced bullion coins are generally available at competitive prices and are usually easy to resell. As you can see, the ease of resale gives the gold bars VS gold coins competition to the coins.

Best Option

A better option is rare U.S. gold coins . They increase in value much faster than either gold bars or the gold bullion coins. The reason for this is that their value is not tied simply to the amount of gold in them, but their intrinsic value based on their rarity, demand, and beauty. These coins can be sold to private collectors who may be searching for them and may be willing to pay a higher premium, especially if the coin helps to fill out a set. So in the competition between gold bars and gold coins, the rare gold coins seem to be an even better investment, especially for the long term investor.

The bottom line is that when you look at gold bars VS gold coins, larger gold bars may be a more efficient way to buy gold, but can be harder to sell and difficult to transport. Bullion coins can be a better investment than bars, as they are easier to both purchase and sell. Rare gold coins may be the best investment of all, and they are much more portable than those large gold bars. They tend to increase in value regularly over time and can be an effective part of a diversified investment portfolio.