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The Euro and The Franc

Post date: January 15, 2015

Place: Switzerlandeurofranc

Information: The Swiss franc ”decouples” from the Euro.

Reaction: Franc goes up 15% versus the Euro

 

Some times interesting history is created right before your eyes and you never see it happen. January 15, 2015  is one of those days.  I do not think that the change in the Swiss franc’s relationship to the euro will register with the average American. The good news is if you are reading this you are above average! The Swiss bank’s move will have serious financial repercussions throughout the world.

Starting September of 2011 the Swiss National Bank (SNB) pegged the Swiss Franc (SF) at 1.2 Euros. As of 1/15/15 they announced that that was no longer the case. The Euro has been falling over the last 6 months and it seems the SNB had had enough of the euro dragging the franc down.

After the announcement the SF rose 30% against the Euro. It settled at +15% for the day.  The change made many Swiss companies that export their goods upset, as a strong franc makes their business less profitable. The biggest splash was made in foreign currency exchanges where people are allowed to borrow, and basically gamble, on currencies. People who physically possessed SF had an increase in value, but people who gamble by trading went the opposite way. The federal government allows foreign exchange (FX) companies to leverage at a 50 to 1 ratio. This means that a 2% change in a currency can wipe a day trader out.  Hundreds of millions of dollars were lost by traders putting some brokers out of business.

I’m not sure what lesson you want to take from this move. Perhaps Switzerland will not ”peg” it’s price to anything else. Perhaps new FX trading laws will be brought to legislation. Perhaps day traders will learn their lesson. But perhaps, just perhaps, most Americans will move along with their daily lives without thinking twice about what the euro or the franc is worth.

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Top Gifts for Christmas from OPC

Everyone loves lists. Everyone loves shopping. Let’s put them together for our top gifts for Christmas.

2014eagle

1. 2014 Silver Eagle- Uncirculated. These one ounce silver coins make great gifts for all occasions. $20-$22

2. Morgan Silver Dollars MS64. These pieces of history are always a hit and are one of the most popular us coins ever minted. Retail $70

3 2014 Silver Eagle – Proof Condition. See number 1. The proof version has mirrored fields and come in a plush velvet case. They retail at $70

 

copperrrrStocking stuffers!~ These novelties are fun for collectors.

1 Copper rounds and bars. From 1/4 ounce to 1 kilo. $2-$35

sharkteeth

Shark’s Teeth $5

2 Shark Teeth. Great for the kids only $5 each. {For the big kid in your life- Megalodon teeth $60-$600}

3 Silver Certificate $1.00 bank notes – $1.50 each.

 

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Everglades Quarter

Everglades Park Quarter

Everglades National Park Quarter

 

The 25th coin out in the America the Beautiful series is the Florida Everglades National Park. It became a park on December 6th, 1947. It covers over 1.5 million acres. Don’t mistake the big bird on the back for a Blue Heron. It is an Anhinga. Yup, I didn’t know what an Anhinga was either without looking it up!  The other bird is a Roseate Spoonbill. Overall it is a very nice looking coin. There have been some in the series that were hard to see, but this one is clear.

 

Anhinga

Anhinga

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Martha Washington

US currency is rife with famous political figures. From Presidents to Secretaries of State to Generals, there are many men to collect. Many of these figures  you probably have never heard of unless you are a political junkie or history buff. Most of the women on US notes are allegorical, that is to say they are not real people but a figure representing a concept or a belief.

The exception is Martha Washington. She was prominently placed on the left hand side of the 1886 United States Silver Certificate. The portrait used is the famous Charles Francois Jalabert painting. It was engraved by Charles Burt. The front design for this note was used for 10 years. The back of the note was changed halfway through, in 1891. The 1886 note is very popular and is often simply referred to as a “Martha”.

mwashington

Martha Washington on US 1891 Silver Certificate

I think it speaks to the spirit of the times when you look at who is on the currency – both in the past and present. Here is a list of the other people featured on the 1886 Series Silver Certificates.

FullSizeRender

  • $2 General Winfield Scott Hancock, Union General – Civil War
  • $5 Ulysses S Grant, 18th President and Union General – Civil War
  • $10  Thomas  Hendricks, Vice President March 4, 1885-Nov 25, 1885.  Died in office.
  • $20 Daniel Manning, Secretary of the Treasury from 1885 – 1887

Although higher denominations circulated at the same time, they were not from the 1886 series. When a knew series came out in 1896 (the so-called Educational series) Mrs. Washington was on the back of the note opposite her husband, president Washington. They are the only husband and wife together on a US note. Together the 1886 and 1896 Silver Certificates are among the most popular with collectors.

mgwashington

Back of the 1896 US Silver Certificate

Posted in: Currency, Education

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Lying

Statistics. Politicians. Advertising. What do these things have in common? Lying!

Perhaps that is a bit harsh. Would you put coin dealers, mechanics and car dealers in the same group? Most people would. Let’s face it, those reputations are there for a reason. But how do you counter the liars and their lying lies? The  best way is through education. Q: Who is less likely to get ripped off by the mechanic? A: Men, because the shop owner assumes the man has a higher level of knowledge compared to his female counterpart. Q: Who do the mail order and advertisers try to deal with. A: The novice, because they have a lower level of knowledge.

What if you are a novice, how do you stop getting burned?

A great way to spot a bad deal is in the newspaper!

A great way to spot a bad deal is in the newspaper!

There are things to look for in advertising, especially in coins and paper money, that are misleading.

  • “Up To”
  • “Hurry”
  • “Prices Subject to Change”
  • “Actual Prices may vary”
  • “Members of…”

Up to is the catch all you use to give people big dollar signs in their eyes. “I’ll pay up to $2,000,000 for a coin”. That may be true, but what do they normally pay for coins. And what if that coin is worth $4,000,000? Would you sell it for $2M?  In fact the ad we picture was just in the local paper and they say they will pay $100,000 for a 1913 Nickel. Well shoot, ain’t that generous! Except there are two problems. 1) All 5 known specimens are accounted for. 2) The coin is worth $1,000,000+ !

Hurry is a term that all advertisers use. They try to convince you that time is limited or that an item may sell out, or prices may go up (or down depending on the business). One day only! Sunday, Sunday, Sunday!

The prices changing line is used in large volumes of print and radio ads. That price sounds great! And then you call and….oops, so sorry, you missed that price, it changed. So in other words, we just told you want you want to hear to get you in the store or to call, and while you are here perhaps we can do some business!

Members of may need some explanation. Businesses use these pay for memberships to prove they are trusted or reliable. The only problem is that anyone can PAY to get the membership and logo. It does not mean they are trustworthy. The other problem is that many of those associations do not actually weed out the bad guys.

Although these ads may not be lying, they are certainly designed to deceive. Be careful who you deal with, and always educate yourself. Also, take time to ask other people who they deal with. Word of mouth is often a good indicator of who you will want to deal with.

 

 

 

 

 

 

 

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Insurance, Coins and Deductibles

What do you need to have, hate to buy, don’t want to use, but are glad you have it when you need it? No, not an umbrella…insurance!  This post is not an in depth study of insurance practices and coin collecting, but it is a quick reminder to check your policy. Here are some things to check up on.

  • Do I have coverage for my coins
  • What do I need for evidence in case of loss
  • What are my deductibles

moneybag

Many homeowner and renter policies have some type of coverage for coins or jewelry. That coverage, however, is often very limited in nature. Depending on your coverage it may be $500-$2000. This may cover your needs, if not you may need a special rider on your policy. A rider is additional insurance for items not normally covered.

The next thing to look into is what type of proof of value you need to get to the insurance company. They will need to know what you have and what it is worth. But they will want evidence of value. Some ask for receipts. Others will want an appraisal. Others may ask to physically see what you have.

One more important thing to know is what your deductible is. The deductible is an upfront charge from the insurance company when a claim is made. You pay the deductible to the insurance company and then they settle the rest of the claim. (This is to stop people from filing claims willy nilly). Here is a tricky thing for you to look into, make sure your deductible is the same no matter what type of claim it is. Many policies will have a different deductible for an act of nature versus a burglary. So look at your fine print and ask your agent if there are different deductibles on your policies. You may think you have a $500 deductible, and then when you have a theft find out it is $1500!

Those are some quick pointers that will hopefully help you be prepared. Here’s to making our insurance agents rich and to hoping we never have to make a claim!

Posted in: All, Coins, Education

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PCGS Price Guide

I have written about the many rip off artists that are wolves in sheep’s clothing. But what happens when your trusted advisor turns out to be a sheep, but the Benedict Arnold of sheep?

The tele-marketers harm the coin market. They give everyone in the industry a bad name. They cause confusion. They misrepresent item’s values.  So I would like someone to tell me how that is different than PCGS’s price guide.  It causes confusion and misrepresents the true value of coins.

Here is what I mean. Today I had a gentleman come in with some high grade Lincoln cents, all PCGS graded. He used the PCGS price guide to value them. Many of the coins are modern (1940s and newer). Many of the coins are not listed in any reputable price guide. So I did some research of recent auctions to try to find prices. Many of the coins on his list were selling for half (or less) of the PCGS price guide.  What good is a guide that is wrong by 50%? Perhaps the weatherman would like to answer that question.

The problem of coins being overpriced in guides is nothing new, but PCGS has positioned itself as a highly trusted brand. So when they portray values, collectors believe them. I’m wondering if there is any brave souls in the industry that are willing or able to tackle this problem. It is a black eye to coin collecting. It isn’t as bad as what the stamp dealers did in the 80’s, but numismatists need to be careful so we don’t go down that same road.

It is very confusing for new collectors to understand value when the first thing they are told is to only buy certified coins and to only trust NGC and PCGS. Then they look at the PCGS price guides and buy based on it. But what happens when they go to sell the coins? No coin dealer likes to be in the position of trying to explain to a collector why their coins are worth 20%-50% of what they paid for them. PCGS doesn’t have to worry about the pricing, they aren’t paying those prices.

As a community it would be helpful if more collectors (hello ANA!) would cry wolf on price guides put out by the “independent” coin grading companies. PCGS and NGC- please just grade coins and don’t set prices. It is a conflict of interest and it causes confusion and misinformation in the marketplace.

Posted in: Coins, Consumer Awareness

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Sand Dunes Colorado Coin

Great Sand Dunes Colorado Quarter.

Great Sand Dunes Colorado Quarter.

The mint has released the newest “America the Beautiful State Park Quarter tm”.  It is the Colorado Great Sand Dunes National Park. The coin features two figures by the river with the dunes in back and a snowcapped mountain in the background. The park was created by a law signed by Herbert Hoover in 1932. The land for the state park was expanded in the early 2000s. Around 285,000 people visit the park annually. You can visit the park’s website here.

 

 

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The Jewelry Myth

solitaireNot all Americans are showy. There are many plain sort of folks out there who don’t need fancy things. But even those plain sort of folks can end up with gold or diamond jewelry through a family member or marriage.  And even though these regular people are not consumed with consumerism, they still fall into the trap of thinking diamond jewelry is very valuable.

Before the yelling starts about me being against the jewelry industry, I’m not. I just find it ironic that the same American people who buy a TV for $700 that is worth $70 in 6 years, or buy a car for $20,000 that is worth $5,000 in ten years, get upset when they find out the ring they bought at Zales for $4500 is only worth $450.

Carat Total Weight is a scam.

Carat Total Weight is a scam.

If you choose to spend $8000 on a ring for your engagement, that is okay. Just remember it is probably only worth 10%-25% of that if you buy it at a national chain jewelry store. The reality is that most of the cost of the ring is the store’s overhead. That is the cost of the building, the labor, taxes, and profit. The wholesale cost of the ring itself is a small percentage of the total cost you are paying. And even a smaller percentage of that is the actual value of the diamonds or the gold. When you buy new, you are also paying for the creation of the ring.

This is why when you buy a ring at a major store they usually have a no return policy. Or they have a policy where they will take the item back IF you spend TWICE as much on a new item. Wow, nothing like losing twice as much money as the first time.

Lot's of Volkswagens

Lot’s of Volkswagens

The jewelry industry has great marketers and marketing strategies. One thing you will see often is a ring listed with a “Ctw” – Carat total weight (or TCW). What they will do is put 20 little five point diamonds in a ring and call it 1 carat, total weight. It sounds good at first, like having 100 single dollar bills gives you $100. But it doesn’t work that way with diamonds. It is more like saying that if you have 10 Volkswagens you have a Maserati. Well my friends, if you have 10 Volkswagens you do not have a Maserati, you have 10 Volkswagens!

Not a bunch of Volkswagens!

Not a bunch of Volkswagens!

Some of you may be wondering what the alternatives to buying at the box stores is, and my answer is to shop pawn shops and second hand stores. You don’t need to know much to get a better deal. The rings pawn shops buy from individuals are mostly of the same quality as those you get at Jared’s, Kay’s or Zales. In fact they were probably bought there originally.

Posted in: All, Consumer Awareness

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FRN Districts

There are a lot of numbers and letters involved with currency. On US Currency you will notice the long serial number. But what about those other numbers and letters on the sides of the serial numbers? What do they mean?

 

NewYork3

The B2 Indicates the district.

 

When the Federal Reserve system was developed in 1913 the country was divided into 12 districts (warning Hunger Game fans: No relation to the 11 districts). The districts sizes were determined by population first and geography second so the western districts cover huge tracks of land.

Name of District Number Alphabet
Boston 1 A
New York 2 B
Philadelphia 3 C
Cleveland 4 D
Richmond 5 E
Atlanta 6 F
Chicago 7 G
St Louis 8 H
Minnesota 9 I
Kansas City 10 J
Dallas 11 K
San Francisco 12 L

KC100

1928 $100 Features the number 10 for Kansas City

1950's Kansas City note with J for the District letter.

1950’s Kansas City note with J for the District letter.

The 1928 Series of Federal Reserve Notes were the first notes set at our current size.  Before 1928 they were larger. Today we call them large size and small size. The 1928 greenbacks used the alphabet at the front of the serial number and used the number in the seal and in the four corners.

 

DCleveland

The Federal Reserve Bank Notes of 1929 have the District listed by name and the letter in several spots.

The 1929 Federal Reserve Bank Note series had a crisp clean look with the name of the district on the note with the letters in the corner. One thing that is consistent over the years is that at the beginning of the serial number you will find the district letter.

Large Size

7g

1914 Series with an Alpha-Numeric seal.

clevelandrocks

1918 Series $1 with Cleveland.

The 1914 Series Federal Reserve Notes have an alpha-numeric seal on it. So a note from New York will have a “2-B” in the seal. They also have it in the four corners of the note. The “Federal Reserve Bank Note” Series of 1918 does not use the large seal but does have the smaller annotations in the corners.

 

 

The black alphanumerics indicates the district, and the second letter in the serial number matches.

The black alphanumerics indicate the district, and the second letter in the serial number matches.

 

Map of the Districts

 

Map for the Federal Reserve Districts

Map for the Federal Reserve Districts

 

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