Mint News Blog

News, Information, and Commentary on US Mint Products

Friday, September 11, 2009

America the Beautiful Silver Bullion Coins


One aspect of the upcoming America the Beautiful Quarters Program that I wanted to explore are the "bullion investment products" that were included in the authorizing legislation.

Public Law 110-456 which authorized the America the Beautiful Quarters program, also authorizes the Secretary of the Treasury to "strike and make available for sale such number of bullion coins as the Secretary determines to be appropriate that are exact duplicates of the quarter dollars."

These silver bullion coins will use the exact design of the each quarter from the series, including the inscription of the denomination "quarter dollar." They will be minted in .999 fine silver, with a diameter of 3 inches, and a weight of five ounces. The fineness and weight will be edge-incused on the coins. Because of the coin's specified diameter, they would have a thickness more than twice the standard one ounce American Silver Eagle bullion coin.

The silver bullion coins will be available no sooner than the first day of the calendar year the quarter dollar will be issued, and will only be available during that year. Fractional versions of the coins are specifically prohibited by the legislation.

The coins will be distributed through the US Mint's authorized network of bullion dealers. Presumably they would be sold by the US Mint to the authorized dealers at a standard mark up above spot price of silver. (The US Mint current charges a mark up of $1.50 per coin to authorized dealers for the one ounce American Silver Eagle bullion coins.) The authorized dealers would then resell the coins to other bullion dealers, coin dealers, and the public at a further mark up.

The Director of the National Park Service (or his designee) may purchase the bullion coins from the US Mint in quantities 1,000 at a time, and resell or repackage them as the Director deems appropriate.

Collecting America the Beautiful Silver Bullion Coins

The America the Beautiful Silver Coins will have some unique aspects. They will represent the only other silver bullion coin issued by the US Mint since the American Silver Eagle was introduced in 1986. The coins will also be the first bullion coin from the US Mint with a precious metal weight greater than one ounce. Several other world mints already issue bullion coins in higher weights, such as the Perth Mint, which releases some bullion coins with weights as high as 10 kilos.

The unique aspects of the series and the larger canvas for the coin design will likely draw the interest of some coin collectors. I think the earliest releases in the series will likely have the highest demand and ultimately the highest mintages. Over the course of the series, collector interest and mintages would likely wane, but may be impacted along the way by changes in the price of silver.

Some third party grading companies will likely accept the coins for encapsulation and grading despite the larger size. NGC already offers encapsulation and grading for some larger sized coins such as the Chinese Gold Panda, with even 1 kilo coins encapculated and graded in giant holders.

I see it as possible that the National Park System might create some type of uniquely packaged silver bullion coin, as allowed under the authorization. This would create another potential class of collectible, with a more limited distribution than the standard bullion version.

If one was to collect the entire series of 56 America the Beautiful Silver Bullion coins, they would have a weight of 280 ounces or 17.5 pounds of silver. The collection would also have a cost of about $5,000, assuming that the coins could be purchased for around $85 each ($17 per ounce) for the duration of the 12 year series. I think this cost estimate will ultimately prove too low.

As a final consideration, the new America the Beautiful Silver Bullion coins might draw ire from some collectors, particularly if they begin to view the series as yet another barrier to the production of collectible proof and uncirculated American Silver Eagles.

Next year, the US Mint will be required to produce one ounce American Silver Eagle coins "in quantities sufficient to meet public demand", five ounce America the Beautiful Silver coins in quantities "the Secretary determines to be appropriate", and collectible proof and uncirculated American Silver Eagles with no specific requirements. Since the Silver Eagles minted for collectors lack a legislative mandate, they would seem to fall into third place for the Mint's attention.

More America the Beautiful Quarters Coverage

This morning I provided some additional coverage on America the Beautiful Quarters on Coin Update. In the style of the site, I provided links to an array of articles covering the new quarter series. In addition to articles about the overall series, I also sought out local coverage which discusses specific sites.

Some of the more interesting reactions came from locations who viewed the new quarters as potential boons for tourism ("If you mint it, they will come") and other locations whose preferred sites were rejected by the US Mint. My home state of New York initially wanted Niagara Falls to be depicted.

Lastly, I will repost one paragraph from Coin Update where I link to an old article I wrote for the New York Times concerning the new quarter series:
I would also like to provide a link to an article that I wrote for the New York Times shortly after the legislation for the new quarter series was signed. Although I did enjoy the 50 State Quarters series, I think reusing the same concept over and over again becomes dull. With no disrespect to the sites selected for the impending quarter series, I would rather see a single design that could become an iconic and lasting symbol of our generation than another collection of 56 designs representing 56 different things. NYT published the article with the title Change We Don't Need. I had originally titled the article "Too Much Change," which was more to my point.

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11 Comments:

At September 11, 2009 at 12:26 PM , Blogger astroguy said...

I haven't decided yet whether I'm a fan or not. My gut cynical reaction is this is another ridiculous congressional mandate on a Mint that has failed to produce consistently good and inspiring designs for the past, oh, century or so. It's also really weird that they are leaving "QUARTER DOLLAR" on it, considering that it should have a historic value of $5, and it will have a silver value of significantly more.

But, I thought that with the First Spouses program, and there are a few dedicated collectors (~4000, or so, judging by the mintage numbers). And, these will be significantly cheaper due to the silver/gold prices.

I think speculators may like these more than the ASEs due to their weight, and IF the mint can come up with good designs, then the larger canvas may make them actually inspiring. That is, of course, if the designs can transfer well to a 3" canvas from ~ 0.955".

Personally, I may start the series since there may be something like with the first two first ladies. But I'm not sure yet, and I'll have to look at what I would rather have - these 3" gimmicks, or some nice, classic coinage.

 
At September 11, 2009 at 1:09 PM , Blogger Les said...

I did some research a few weeks ago, trying to find out what some of the sites would be. Of the three offices that had information, none of the sites selected by the residents of the state made the cut.

I will likely collect them from circulation, but I sincerely doubt I will buy the full rolls from the Mint. I only picked up some of this year's rolls because of the record low mintage numbers. Hopefully, when next year comes, those numbers will get back up to their regular level.

I agree with the point that the 3-inch versions will put pressure on the ASE collectors; we had enough issues with silver 'shortages' this year to last for a while.

Final note: where are the designs? The 50 States (and the DC/Territories) coin designs were well known by this point, but not so much as a bit of next year's reverses has yet been seen, and with 112 days left before 2010... sigh.

 
At September 11, 2009 at 4:46 PM , Anonymous Anonymous said...

screw these giant quarters! if i want silver i'll buy it in bar form! produce proof silver eagles already!!!!!!!!!

 
At September 11, 2009 at 5:02 PM , Anonymous Anonymous said...

Perhaps the cool feature may be the edge lettering...

 
At September 11, 2009 at 6:26 PM , Anonymous Keith said...

Michael,

One thing that I noticed about the bullion is that there are NO requirements to mint in uncirculated or proof.

My gut feeling is that the Mint will choose to make these coins available in Proof-only format, and then charge on the Proof scale, which would mean a 25 to 50% markup over the bullion price of the coins.

 
At September 13, 2009 at 6:09 PM , Anonymous Anonymous said...

Do we know if these will be legal tender and only redeemable at banks and such for a quarter?

 
At September 13, 2009 at 9:23 PM , Anonymous Anonymous said...

Boy, wouldn't THAT be a kick in the pants? Five ounces of silver for a QUARTER? I thought it was bad enough that one ounce silver eagles are only worth $1 face value. Of course, if the day ever comes when we have to redeem our silver bullion coins for their face value, God help us!

 
At September 14, 2009 at 10:39 AM , Anonymous Anonymous said...

Hey, maybe they could make 5 Oz. Presidential dollars made of real gold. That would put some real life into that program. Oh poop, now I probably gave somebody the idea, and we will see these in next year's catalog.

 
At September 14, 2009 at 11:37 AM , Anonymous Anonymous said...

I, myself, and me have all yearned
(and will settle) for a simple silver $ac dollar.

 
At September 15, 2009 at 9:28 AM , Blogger Michael said...

Technically, I believe that these 5 oz. silver coins are legal tender for 25 cents.

I read that the inclusion of the denomination and some of the other technical aspects were specifically put in place to make the coins legal tender and thereby prevent private mints from creating similar oversized replicas.

I think the 25 cent denomination for $80 of silver is pretty ridiculous, but at least they seem to have a reason behind it.

From Numismaster article:

"By giving it a definition in section 5112 of title 31 of the U.S. Code, and defining it as a coin that the Treasury chief may issue, that makes it a United States coin under section 5103 - the legal tender provision of the law.

The practical effect would also be to tamper with products of other coins which are "supersized" and presently do not violate counterfeiting laws, but just might under a system with silver national park five ouncers in the mix. Here's how and why.

In recent times, a number of private manufacturers have produced large (over-size) medallion-like pieces which are replicas of contemporary coin design. They are not intended as counterfeits, or even eye-fooling replicas, because of their size (generally over three inches in diameter - a size at which the Secret Service has traditionally said is not viewable as a counterfeit).

That's because they are twice the size of a silver dollar (an inch and a half in diameter - and until these proposed coins would move twice the size to a huge six inches."

http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=5904

 
At September 15, 2009 at 10:21 AM , Blogger Lasloo said...

Michael,

Enjoyed your NYT article. Please continue to post links to future editorials you end up writing.

You are so good at keeping your posts (both here and elsewhere) so objective and fact-oriented, its nice to hear what you REALLY think from time to time!

 

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