Who would have thought?  Gold coins with Martha Washington & Abigail Adams that cost $400+ each sell out within 2 hours at the US Mint.  40,000 coins per first lady, and apparently that wasn’t enough.

Unbelievable!

Here is a search for individual first spouse gold coins on eBay. It filters out the people who are selling all four coins at once (or tries to). Some of those sets have been selling for $4000! Right now the price seems to be climbing, but is between $650 – $800 per coin. Amazing.

I have to remind myself that the coins don’t ship for another two weeks (July 5th according to the US Mint).

I caught this article from Dave Harper today on Numesmatic News. While I think it is interesting that it has become well known that eBay is influencing the popularity and monetization of coins in the US, I disagree with his conclusion completely.

Dave argues basically the following:

• The US Mint is producing “instantly popular” coins by limiting mintage.
• The fact that households can buy 5 coins each means that a relatively small number of buyers can “clean out” the inventory of the mint, creating the illusion of popularity.
• These buyers are really just waiting to flip the coins on eBay for a profit.

So far, so good. In fact, this is one of the things I have noticed as well. More issues from the US Mint are selling out quickly, and that’s because I believe that people have discovered the online site and they are able to often sell the coins on eBay for a profit to people who either don’t know about the site, or who miss the launch window for the coin.

But then Dave kind of goes off the deep end a bit with the conclusion:

Now I know sellouts are in the financial interests of the U.S. Mint. The possibility of profit is the only reason the Mint sells coins to collectors at all. However because this sales approach is so exclusionary, perhaps the Mint should sell all of the coins itself in online auctions. The windfall profits would then belong entirely to the government, and theoretically at least, a piece of the profit would accrue to all Americans as a few dollars less in taxes that would have to be paid.

Sporting events don’t sell all of the tickets directly to scalpers. They at least try to achieve some semblance of fairness. The Mint should reflect on what it is doing in this light.

Huh? What?

I had to read it again to make sure I understood what he was saying. The analogy with tickets made no sense to me juxtaposed with the idea for the US Mint to auction off coins.

Most concerts and sporting event venues try to ensure that “true fans” will have access to tickets. While I find that argument fairly specious, their solution to the problem is to sell the tickets at a fixed price, and start the sale at a public time, limiting the number of tickets any individual can buy.

That is exactly what the US Mint is doing!

They have a fixed price ($429.95) and they publicly announced the fixed time (June 19, 2007) when the coins would go on sale. They then limited each buyer to 5 coins each.

How is that not fair compared to ticket sales?

I myself posted the date and time on this blog weeks in advance – the US Mint has been advertising it for quite a while. The people who cared went to the site and bought the coins. I didn’t exactly camp out either – I flipped to the site when I had a spare moment, 52 minutes after the coins went on sale, and I bought a couple myself.

Now, don’t get me wrong. I love auctions. I think that they are a great way to ensure that the people willing to pay the most get the goods, and that sellers get the most for their goods. It is literally supply meeting demand.

But it’s hard to argue that if the US Mint auctioned these coins off that it would be better for the individual investor.

It was not a given that the First Spouse coins would sell out. Believe me, I’ve purchased supposedly hot coins at the US Mint, only to see their value drop over time due to lack of interest and demand years later. The supposedly collectible nickels from 2004-2006, for example, aren’t exactly trading for a premium.

In fact, I believe I argued on this blog that the First Spouse coins would not be popular – who is going to pay over $400 a coin for a series of over 40 first spouses ($16,000 total), when most of the women featured are literally unknown to 99.9% of Americans?

Now what Dave should have argued for is a lottery. The US Mint could have reserved some coins to be distributed, not based on first-come, first-serve, but based on a lottery across interested parties. You’d put a small deposit down, to ensure only real buyers, and a valid form of a payment. Then the US Mint could collect names for weeks, and pick winners who would then get the coins.

Oh well. Count this buyer happy.