(Continued from page 1)

constantly shift value between themselves, searching for the proper valuation level.  Thus, as the U.S. economy improves, and the dollar increases in value compared to worldwide currencies, it is likely that the value of gold will fall relative to the dollar as the dollar.  Now therefore, is probably a great time to sell gold bullion and gold coins that are strongly tied to the gold bullion price. This would include circulated common date gold as well as other gold coins that have benefited from this temporary gold price hike. This price increase has nudged a slight increase of demand for  numismatic gold coins.  How strong the demand will remain in the face of falling gold prices likely to accompany a strengthening dollar in the next year is unpredictable.   

      Generally speaking, the improving economy is good for the coin market, as collectors will continue to have the wherewithal to buy.  Since this improved

 

Pattern Basics

Part 2

Why Pattern Prices Continue Upward Explosion.

Economics and the Coin Market

Customized Numismatic Portfolios

more evidence surfaces all the time.

      I recently found a head on comparison that is an eye-opener.  A Proof-63 1858 flying eagle cent

 

economy appears to also feature a lackluster stock market, and extremely low interest rates, there seems to be little in the economy to distract collectors from their coins any time in the near future.   

      Another likely result of the low dollar and the economic improvement is a second term for George Bush.  We are only 18 months away from the 2004 elections, and all along, Democrats have been pushing the state of the economy as a campaign issue.  An improving economy will take the wind out of those sails.  A second term for Bush will likely result in the continuation of the tax cuts, providing those who buy coins with more discretionary income.

      The net result is that the economy is not now having a major impact on the

      On page two, I compare an 1858 pattern flying eagle cent with the regular proof.  The coins are similar, but the pattern is far more rare, and far less expensive.

      This is the case with almost all pattern coins,  and is one reason pattern prices are exploding so dramatically.   Expect Pattern price increases to continue until they reach parity with other coins of similar rarity and condition.  At this point, that is somewhere between a FIVE TO TEN FOLD INCREASE!!

      Another cause for the Pattern price expressiveness  is demand generated by publicity. This summer, the new Judd Book is being published, the Red Book has a pattern section for the first time, and several major articles on patterns have been published in major coin periodicals.  Patterns are the hot news of the day. Patterns were so obscure until now that this explosion of publicity is almost like a Debutante Ball for Patterns.

      Another propellant for Pattern Prices is inertia: things in motion tend to stay in motion (thank you Isaac Newton).  Pattern coin prices are in motion.  The price guide in the New Judd Book shows strong increases from levels of the first price guide printed in February, 2000.   Despite those increases, future potential remains huge.

      Finally, and most significantly, there are so few patterns - less than 12,000 total certified coins including all grades and designs. Even small increases in demand send prices skyward.

      It would be as if you could pay desert prices today for a few acres, that would magically end up in Beverly Hills tomorrow. 

  SIGN ME UP!

 

 

 

 

 

 

 

 

 

Pattern Coins (cont')

 fundamentals

pattern with a mintage of 32-75 pieces was sold to a client for $2800.  That same year, there were 200 proofs minted of the regular 1858 flying eagle cent.  In Proof-63, the regular 1858 retail price is between $9000-10,000.  So, in effect, the pattern coin - a virtually equivalent issue - was about three times as rare, but less than one third the price.  This kind of price/rarity relationship is typical of pattern coins and regular coins and proofs, and I expect the upward thrust in patterns to continue until patterns reach some parity with the rest of the coin market.

  We have a long way to go - a very long way.

 

 

 

 

 

 

 

are up 10-20% in 2002. The February 2000 Pattern Price Guide, the first price guide ever printed for patterns, is obsolete. Twice in 2002,  patterns were so scarce many dealers (me included) had absolutely zero Pattern Coins in inventory for several weeks!

  Today, Pattern Coins are generating a great deal of interest in numismatic circles.  Publications coming out this summer should amplify that interest dramatically.

  First, according to Robert Hughes, one of the foremost experts on Patterns and author of the first Pattern Price guide, a new price guide will definitely be published this summer. With it will be Hughes’ updated Judd Book (the “bible” of Pattern Coins).

  As if that and the accompanying promotion were not enough, for the first time in history, the 2004 “Guide Book to US Coins” known as the “Redbook” - the most widely sold and read book on rare coins - will feature a special section on patterns. The 2004 Redbook will be released in August, 2003.

  In short, this summer will see a publishing and promotional blitz on Pattern Coins.  For the first time ever, this unique and fascinating area will be at center stage of the numismatic markets. 

  That is a large splash, because up until now, Pattern Coins were mainly the province of a small group of dedicated collectors. The vast majority of coin collectors have never even heard of pattern coins. 

  That will change this summer. Like a debutante strutting onto the ballroom floor for the first time, the elegance, beauty, rarity, romance and relatively inexpensive prices of pattern coins will turn heads, thrusting them out of obscurity forever - a once in a lifetime event. For pattern buyers who want a shot at big price increases, the time window between now and summer may well be a once in a lifetime opportunity.