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Fake Round Can Cause Real Problem
By Patrick A. Heller
August 14, 2012
Counterfeit Engelhard 1-ounce silver Prospector rounds have surfaced. Engelhard was one of the most popular brand names of manufacturers of silver bars and rounds up into the mid- to late-1980s. Their 1-ounce round silver Prospectors are still highly desired by investors in physical silver, even though they have not been made for a quarter-century.
At the ANA show, another dealer brought a few pieces of counterfeit Prospectors to warn other dealers of their existence. The fakes, which showed up in Florida, had the proper diameter and thickness and weighed only about 0.5 grams light. Such pieces would almost certainly fool the general public as well as dealers who did not pay close attention. The bad pieces contained about 60 percent copper, 39 percent zinc and a smidgen of nickel, which was then silver-plated. The surfaces were mirror proof-like whereas most Prospectors have a frosty satiny look. The fakes at the ANA all had the large “E” in the center of the reverse inside a globe (as appeared on earlier Prospectors) rather than the eagle that was used on later Prospectors. If a few of these were mixed in a large batch of silver rounds, they could easily pass from hand to hand without notice.
Counterfeit silver Eagle green boxes have been spotted. One dealer reported that it was now possible to purchase counterfeit green plastic boxes in which 500-coin lots of U.S. silver Eagle dollars are sealed at the U.S. Mint. It would be a relatively simple task for crooks to fill such boxes with a variety of less valuable products, and seal them with a plastic strap and counterfeit U.S. Mint seal.
While there were no reports of counterfeit sealed boxes of silver Eagles, yet, this is an ominous development. Many buyers of bulk silver Eagles want to acquire them in sealed boxes, in the hopes that some of the coins might grade perfect Mint State-70. But, if sealed boxes cannot be guaranteed to contain 500 silver Eagles, the first change that would probably occur is that custodians of Individual Retirement Accounts precious metals and coins will start to refuse to accept such coins in sealed boxes. The current premiums at which these boxes trade could evaporate as sealed boxes would largely become unsalable.
A new fake? New shortage? One of the reasons to attend coin shows is to gain insights from others on a face-to-face basis that might not occur over the telephone, or over the Internet.
Intelligence can help in predicting which market niches have better or worse prospects, which dealers might be in financial difficulty, and what is hot and what is not.
I was one of four members of my company to attend the American Numismatic Association World’s Fair of Money in Philadelphia last week. While buying and selling coins and paper money, attending meetings, and receiving awards, here is a sampling of some of the information we picked up that I think readers would appreciate knowing:
Will there soon be a shortage of U.S. $20 gold pieces? A few months ago, the premiums on pre-1934 double eagles fell so low that some pieces could be purchased for premiums similar to what it would cost to purchase U.S. American Eagle and U.S. Buffalo gold coins. On a wholesale basis, that means that there was no incentive for European sellers to liquidate the coins for scrap metal value. Even though there is not a frenzy of demand for double eagles, supplies are tightening and premiums are slowly rising.
Unusually large supplies of U.S. gold coins are coming from France. Buyers of U.S. coins working in Europe report that U.S. gold coins are more readily available in France than usual, while supplies in other European countries are less common. This shift in supply could be an indication of the relative financial straits in France.
Strong demand for “fresh” low-priced inventory. In show reports, there are consistent dealer laments about the dearth of “fresh” inventory. This lament doesn’t just apply to top quality or high-priced coins. Because two of our staff drove to the show, they were able to bring along dozens of boxes of collector coins stapled in cardboard 1-1/2 x 1-1/2 or 2x2 holders. In other words, most of these coins were worth less than $20 apiece wholesale. At most shows that someone on my staff attends, we are not able to bring as much inventory to offer for sale. As a consequence, our coins were generally considered “fresh” on the wholesale market. As best I can tell, we sold between 1,000 and 2,000 such coins at the ANA. I’m not going to brag that the prices were especially strong, but we also weren’t giving away anything.
Areas of especial interest included Indian cents, early and scarce date Lincoln cents, early Buffalo nickels, Barber dimes, early Mercury dimes, Barber quarters, Standing Liberty quarters, Bust half dollars, Barber half dollars, and early Walking Liberty half dollars. The coins of most interest were those that were at least a bit nicer than the typical quality for the date.
The word was hotel buyers are cutting back on operations. One of the largest companies that blanketed the country with these buyers for a few days at a time has canceled almost all activity for the past two months. The reason is that they are simply not purchasing enough material to cover the travel and advertising overhead costs. This is happening even though such buying operations have frequently been reported as paying a very small percentage of wholesale value for the coins, paper money, collectibles and jewelry (especially when compared to prices offered by local merchants).
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Originally Posted by Silver Rocket Bitches!
