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.
Labels: America the Beautiful Quarters