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The Coin Analyst: Is “Mint to Demand” the New Normal?

by Louis Golino for CoinWeek…..

Some U.S. Mint products have always been essentially made to demand, that is produced to whatever level buyers order, rather than set to a specific mintage level. Examples include proof and mint sets and proof and burnished American silver eagles.

But in the wake of the widespread criticism the Mint received for its handling of the release of the 2011 25th anniversary American silver eagle sets, an increasing number of Mint products are now being produced to demand, including some which had previously been limited, as well as new products.

When the Mint’s projected demand of 5 million coins for the Chester Arthur presidential dollars turned out to be insufficient, the Mint said it would make more coins to meet the demand for them. Since then orders for more than 7 million coins have been received, and they are still coming in.

It is not clear what is driving the demand for Arthur coins. In December Vice President Biden announced that dollar coins would no longer be made for circulation because nobody wants them. But a lot of collectors clearly do want them, and they are stacking up large quantities of the Arthur dollars for whatever reason.

It is unlikely that President Arthur is particularly popular with collectors, so the expectation of a low mintage coin seems to be the likely reason for the demand. But now that the coins are being made to demand, one wonders whether that information has just not reached a lot of people, or whether there was pent-up demand because the release of coins was delayed for a couple months.

The five-ounce silver America the Beautiful coins, which during their first year of production (2010), were limited to a run of 33,000 coins per design, are also now being produced to demand. This only applies to the bullion versions since the collector versions are currently limited to 25,000 per issue. That move is likely to further erode demand for a series that has already seen a big drop in interest.

If the bullion versions had actually captured the interest of bullion investors the way American silver eagles have, then unlimited mintages would not necessarily be a problem. But those looking for as much silver as they can get for their money are likely to opt for bars or rounds, while those interested in the designs of the coins are probably going to want the limited edition collector versions, even at a premium of around $40 a coin.

The recently-announced special two-coin American silver eagle proof set to mark the San Francisco Mint’s 75th anniversary will also be made to demand. And the first circulation-quality quarters minted at San Francisco since 1953, which will begin with the June 21 release of the El Yunque “S”-mint quarters, will also be made to demand despite early reports that suggested the coins would be limited to 1.4 million pieces per issue. Collectors have expressed a range of views on the proliferation of “to demand” products.

Some are pleased they will not have to jump through all kinds of hoops, such as dealing with jammed up web sites and phone lines, and that everyone should have a fair chance to obtain coins from the Mint.

Others make a distinction between circulation coins, whether or not they are only sold at a premium, and coins specifically made for collectors. They feel that circulation coins should have unlimited mintages, whereas collector coins should have limited production. That is the general approach followed in other countries.

In fact, many foreign mints are believed to create demand for their products by making them in small numbers, which often leads to a frenzy to obtain them on the day of release. Many recent Canadian issues have sold out of their limited mintages during a pre-release period when only members of the Master’s Club can order the coins. To be a member buyers must spend at least $1,000 Canadian during the preceding twelve months.

The U.S. Mint has frequently been criticized for creating instant rarities through limited mintages and household limits, and Mint officials have pointed out that it is not the Mint’s goal to make it easy for buyers to make quick profits.

But it now seems to be erring so strongly on the side of caution, that many collectors are wondering if the days of limited-edition coins are over.

In addition, it is worth bearing in mind that if a product is made to demand but sold for a limited period of time, it is only capturing demand during a specific period. Over time more collectors will want to obtain many of those items, and they will be willing to pay secondary market premiums for those coins if they need them to keep their collections updated, or because they appeal in some other way.

It is certainly understandable that the Mint feels the need to discourage “flipping,” as it is called, which leads to rapidly increasing secondary market values that often crash before long.

But if taken too far, this approach risks substantially reducing demand for the Mint’s offerings and driving collectors to other areas of numismatics such as classic coins or world coins.

Besides, there are ways to allow a fair chance at obtaining new coins without making them to demand. The household limit has clearly been abused numerous times, but there are all kinds of other approaches that could be used. For example, order forms could be mailed to Mint customers and then returned during a specific window, or a web site queue system could be used that staggers orders, which is what the Perth Mint in Australia has recently started using to considerable success compared to last fall when it was impossible to place an order for high demand, limited edition offerings.

It does not have to be an all or nothing approach. Creative approaches that combine fair access and limited mintages can be created and used for certain numismatic products that have wide appeal, but which many collectors would prefer to be minted with some kind of limit.

The prospect of price appreciation is a powerful part of the incentive for all types of coin collecting, even if some purists like to pretend otherwise.

If you have an idea for how to limit mintages while allowing broad access, please leave a comment at the end of this article, and suggest it the next time you receive a survey from the Mint.

Louis Golino - WriterLouis Golino is a coin collector and numismatic writer, whose articles on coins have appeared in Coin World, Numismatic News, and a number of different coin web sites. His column for CoinWeek, “The Coin Analyst,” covers U.S. and world coins and precious metals. He collects U.S. and European coins and is a member of the ANA, PCGS, NGC, and CAC. He has also worked for the U.S. Library of Congress and has been a syndicated columnist and news analyst on international affairs for a wide variety of newspapers and web sites.

Louis Golino
Louis Golino
Louis Golino is an award-winning numismatic journalist and writer specializing on modern U.S. and world coins. He has been writing a weekly column for CoinWeek since May 2011 called “The Coin Analyst,” which focuses primarily on modern numismatic issues and developments at major world mints. In August 2015 he received the Numismatic Literary Guild’s (NLG) award for Best Website Column for “The Coin Analyst.” He is also a contributor to Coin World, where he wrote a bimonthly feature and weekly blog, and The Numismatist, the American Numismatic Association’s (ANA) monthly publication, where he writes a monthly column on modern world coins. He is also a founding member of the Modern Coin Forum sponsored by Modern Coin Mart. He previously served as a congressional relations specialist and policy analyst at the Congressional Research Service of the Library of Congress and as a syndicated columnist and news analyst on international politics and national security for a wide variety of publications. He has been writing professionally since the early 1980s when he began writing op-ed articles and news analyses.

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  1. I think the only winners from the NFIC circulation-quality coins are the third party grading companies and those handful of lucky businesses and individuals that get top population quality coins. The only hope that 7 million Arthur dollars will ever be worth anything is if 6.9 million of them get spent.

    I purchased a roll and based on the quality I saw, I only held onto a couple and the rest went into circulation.

    My take is that the hobby would require at least nine or ten million active collectors of the Presidential dollar series to drive up prices of a coin like that- and the hobby is not the big and probably will never be. Buyers should keep that in mind before going all in on these types of products.

  2. Loius,
    While I have no idea on how to make the US mint’s “mint to demand” policy on certain coins better, collectors have to remember that it is the mint’s responsibility to produce coins to fill the needs for everyone and not just to the satisfaction of flippers, who I just despise. Many ebayer’s just do not know what they are getting into and wind up paying more for coins that eventually decline in value. Is it impatience over ignorance ? I think so. This might reduce mintage’s some on future sales from the mint, maybe 10-20%. That should in my opinion weed out the over-buying from the flippers,and the vast array of coin stores. Personally, I like this idea, but at the same time, I hope the mint does not raise their premiums on their offerings to offset the probability in reduced purchases.
    Many interesting points that you have brought up. Thanks…

  3. Great article…. You asked for creative solutions of a win-win variety, and here’s one possibility. Instead of an either/or policy based on mintage numbers– either produce a limited predefined number or produce numbers to meet demand– why not add a more restrictive time dimension to the proceedings as follows…. Mint to demand, but only for one week instead of one month. This would still provide access to the item while simultaneously keeping the mintage numbers lower through limiting availability to a smaller temporal window of opportunity.

  4. What people are failing to realise is the new millennium has actually arrived. This is proven if people actually recall the Y2K hysteria that all the computers would “die” when the year 2ooo hit-up; remember? The reason i mention this is that the ‘old-rules’ no longer apply to “collecting”.
    Decades ago the US Mint made coins for circulation, they were hand made and engraved, tool makers cleaned the production dies and altered the equipment to preserve the wear out rate of the dies. this lead to “different” coin strikes being produced etc. In essence no one at the mint really cared about proofs or mint circulation coins. Their job was to get coins into circulation for the economy.
    Fast forward to 2014 and the US Mint is now required to “make-a-profit” in ‘effect’ the US Mint will do anything to make a fast quid. Every single modern coin is computer controlled to be exactly the same as every other coin. Quality control exists to stop inferior quality strikings being released.
    For example it is the height of silliness to think that a 2012 American Silver Eagle will ever be worth more than the value of one ounce of Silver. Yet ‘crazy-money’ collectors regularly pay 3 or 5 times that silver value for the plastic slab holder. The reason is that only a few people send in coins for the 70 grade holders. Over time as the value of the coin increases people will send in more top quality coins and dilute the ratio of supply versus demand.
    Yet millions of Americans believe these worthless ASE coins will be the “new-morgans” and thus command huge premiums. But the only ones making money consistenly from Silver Eagles are those people who send in early for the 70 grade slabs and the US Mint who profits by selling an ounce of Silver at an inflated price.
    Do not believe me? look at the US Mint informationals’, they will describe their pretty coins as anything eg: ‘historical’ ‘momentos’ ‘keep-sakes’ BUT THEY NEVER suggest their products would make a “sound-INVESTMENT”.
    Thus the US Mint will ‘mint to demand’ and this policy makes the US Mint money. You would be better off using your money in casinos, at dog racing tracks or speculating on lotto tickets.
    Sure every year a couple of mint products are released that make serious profits early, but if you believe a product will increase in value you can be sure many others will out compete you due to the US Mints promoting that product.
    Congress demands the US Mint make money for circulation and ALSO CONGRESS MAKE A RETURN on every product it sells. This can only occur one way and that is by ‘silly-people’ believing these high quality mass produced coins will ever have a chance of increasing in value. Simply put if any one coin starts to make a serious profit millions of collectors will search out the hundreds of thousands of high quality coins in their collections and send it in for grading, thus ‘over-populating’ that coins demand. Meanwhile the US Mint has already “got” its percentage profit…


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