Head scratcher

[Grant Lamontagne]

I was just at the post office, which is not only a place to send and receive mail, it is also the retail outlet for the Royal Canadian Mint.  While waiting in line I had a look, as I usually do, at the coins, which always interest me, but not enough to actually plunk down money for them.  After all, some of these things are pretty expensive, which got me to thinking.... why the heck do they cost so much?

Ok, special mintings, limited runs, precious metals... I get that.  You may not know this, but I run a large forum dedicated to collectors, so I get that these are special- but what I don't get is how the government (both Canada Post and the Royal Canadian Mint are Crown Corporations, aka government) can legally produce something called a ten dollar coin and then charge $125 for it.  For example:

https://www.mint.ca/store/coins/1-oz.-pure-silver-coloured-coin-%E2%80%93-emdc-comicsemsuptmsup-emoriginalsem-the-trinity-2016-prod2770453

It states 20 DOLLARS on the coin itself, and, if you look down at the specifications, it says:

Face value   20 dollars

Then look up at the price, assuming a current issue $20 coin worth $20 will be $20... but no, it's $112.95!  Now my math isn't the best, but it seems to me that $112.95 is a bit higher than $20.   

So where do they get off calling it a $20 coin?  I could see if there actually was a $20 coin in circulation that people would know about, and this was in the format of a $20 coin, but the biggest coin we have in circulation is $2, with rumors of a new $5 coin coming eventually.

Now imagine you are a shop keeper and someone comes in to spend this on a bottle of soda and a bag of chips- how much change do you give that person?  $16.25?  $107.83?  It's confusing, because apparently $20 is worth $113 to the company that is tasked with manufacturing our currency.....   

And, if you are the shop keeper, can you legally refuse the sale based on not knowing the value or legitimacy of a coin that you cannot prove is not legal tender?  I would hate to run a shop and be sued by a customer who tried to pay for $20 worth of merchandise with a $20 coin, or worse, someone who thinks they can buy $110 worth of product with a $20 coin.   

There's a simple solution- just call it a "1 oz. Pure Silver Coloured Coin – DC ComicsTM Originals: The Trinity (2016)" and don't smurfing put a value on it that you know is fake.  Otherwise, this is called fraud, and in this day and age of everyone getting upset over who is using what bathroom, why is no one addressing the fraud being committed by the people that supply the currency?

I mean, I get that if the Mint was selling it for face value, and said value increasing in the after market for collectors- that makes sense.  Peter Atwood can't keep product in stock for this very reason- the after market is so lucrative that people knock eachother over to get the stuff.  But they are out and out selling a coin for $112.95 that even they say is only worth $20.

Years ago I remember a news story about a guy who was arrested and charged for selling brass impressions of Abraham Lincoln that were produced by the United States Mint for $20.  People would send him the $19.95 or whatever it was, and he sent them a penny.  Isn't that pretty much the same thing?

Def

[Chako]

The main reason why I stopped collecting coins. I much prefer trade tokens myself. They tend to me more honest.

[Wspeed]

   it doesn’t make sense to me 
A $20 coin is only worth what it says on the coin

[Nix]

I once considered buying an 1895 $20 gold coin....until I learned the asking price was north of $1200.00. A very cool coin, but I didn't have that kind of cabbage in my wallet. 

[gustophersmob]

Well, its impossible to accurately answer this question here, because it is 100% in the realm of politics. Its probably ok to say that this is a tangential result of money with no intrinsic worth trying to maintain a connection to a past where it had said worth.

An anecdote (hopefully not too political0:

There was a guy in the US who realized the same thing as Grant has: that the government's assigned legal tender value to bullion coins was way below their intrinsic "melt" value.  I believe this gentleman owned a construction company, but I might be remembering that part incorrectly.  Either way, he decided to pay his employees the normal monetary value of their salaries, but in gold bullion.  So, if gold was say $1000/oz and you made $50k per year, he'd pay you 50 1 oz gold bullion coins.  Since their legal tender "face value" was set at $50, for the purposes of declaring taxable income, it was declared at $2500. Pretty clever, really.  Except he forgot the absolute most crucial, important #1 key thing: the gov't likes it's taxes, and they have A LOT of guns....

Needless to say, the IRS came after him, and I believe he is leading a slightly more stressful life in a federal prison currently...

Edit: his name is Robert Kahre, and I was right about the construction business.

[Mechanickal]

I thought you only had cabbage in your wallet?

[gerleatherberman]

I can understand antique currency with numismatic value, but newly minted coins costing 4x/5x their face value is highway robbery. Unless their metallurgic value(melt value) is close to, equal to, or more than the asking price.

Yeah. Surprise. I have a coin collection (though not a good one). 

[captain spaulding]

I thought this thread was going to be about those head scratchers the sales people attack you with in the mall!    

[CallsignBadger]

A head scratcher indeed

Wonder if anyone else has said much about it.

[Chako]

I ummm...do have one of those head scratchers. In my defense, it does feel great while in use. 

[ReamerPunch]

That's nothing. Look at it as if it's a limited edition SAK.
Mints produce coins specifically for collectors, so it's just a matter of making new coins, and calling them rare.

The real kicker for me is uncirculated coins. Just a common coin, that's brand new, shiny, with no scratches. And the price goes up, although it's just a common coin.
Uncirculated 5 cents coin selling for $20? If people are willing to pay for it, why not?

[Grant Lamontagne]

I can understand antique currency with numismatic value, but newly minted coins costing 4x/5x their face value is highway robbery. Unless their metallurgic value(melt value) is close to, equal to, or more than the asking price.

Yeah. Surprise. I have a coin collection (though not a good one). 

Fine.... but why call it a $20 coin if it isn't worth $20?

A penny has more value as scrap copper but I doubt you will get anyone to give you more than fifty cents for a whole roll of them.

Def

[captain spaulding]

I ummm...do have one of those head scratchers. In my defense, it does feel great while in use. 

Oh dont get me wrong, I have one as well and it feels nice.   

[pfrsantos]

Well, I can't say nothing against that. After a month working, my boss sends me an e-mail with letters and numbers in it. He also tells my bank to show me different numbers (ussually higher) when I consult my account.

I'd be overjoyed if I got paid with a couple of those real metal coins...

 

[gustophersmob]

Well, I can't say nothing against that. After a month working, my boss sends me an e-mail with letters and numbers in it. He also tells my bank to show me different numbers (ussually higher) when I consult my account.

I'd be overjoyed if I got paid with a couple of those real metal coins...

 

Agreed 

[Outback in Idaho]

 

[Syncop8r]

I once heard someone suggest making notes with a bit of gold in them to keep their value more constant.

[Grant Lamontagne]

Well, I can't say nothing against that. After a month working, my boss sends me an e-mail with letters and numbers in it. He also tells my bank to show me different numbers (ussually higher) when I consult my account.

I'd be overjoyed if I got paid with a couple of those real metal coins...

 

That may very well be, but would you want a $20 coin for every $113 you should have earned?

Def

[gustophersmob]

Well, I can't say nothing against that. After a month working, my boss sends me an e-mail with letters and numbers in it. He also tells my bank to show me different numbers (ussually higher) when I consult my account.

I'd be overjoyed if I got paid with a couple of those real metal coins...

 

That may very well be, but would you want a $20 coin for every $113 you should have earned?

Def

Sure, if I could spend it at its intrinsic metal value, but pay tax on its legal tender face value 

[Chako]

An article dating to 2012 explaining that collector coins bought at face value aren't accepted by most as legal tender.

https://www.thestar.com/business/2012/07/05/coin_collector_learns_the_difference_between_legal_tender_and_spending_money_the_hard_way.html

[CallsignBadger]

Well, I can't say nothing against that. After a month working, my boss sends me an e-mail with letters and numbers in it. He also tells my bank to show me different numbers (ussually higher) when I consult my account.

I'd be overjoyed if I got paid with a couple of those real metal coins...

 

That may very well be, but would you want a $20 coin for every $113 you should have earned?

Def

Sure, if I could spend it at its intrinsic metal value, but pay tax on its legal tender face value 

Wouldn’t that be sweet

[ironraven]

Is it in an assay pack? That raises the price. So does the colored art work. Paint your coins, they don't go up. Someone special paints your coins, they go up. It isn't the coin collector's market or the precious metal buyer's market. It's the fan boy market. The Canadian mint thinks that is what they can take the suckers for. I'm curious what the profits are going to.

As for spot, I just checked- per ounce (31.1g)  is as of 1846 Eastern time, 25Aug18, CA$20.12. So the face value is about right. Silver has lost about US$1/ounce in the past month or so so when that was probably struck, it was under valued, but you get never get spot when you sell or use. Just like you always pay over spot when you buy.

I keep thinking this is the year I'll start buying silver. I keep buying sharp, pointy things, and ammunition.

[gerleatherberman]

I can understand antique currency with numismatic value, but newly minted coins costing 4x/5x their face value is highway robbery. Unless their metallurgic value(melt value) is close to, equal to, or more than the asking price.

Yeah. Surprise. I have a coin collection (though not a good one). 

Fine.... but why call it a $20 coin if it isn't worth $20?

A penny has more value as scrap copper but I doubt you will get anyone to give you more than fifty cents for a whole roll of them.

Def

Apologies in advance, Grant. Would you mind elaborating on the context of the question highlighted in red?

Are we talking about antique coins or the modern, excessively priced, coins in your first post?

[Grant Lamontagne]

New coins provided by the mint.  I understand antique and collectible items having a different value than what they originally were.

In this case, a coin is marked with a face value of $20, and sold by the original manufacturer, which is a government agency (the Mint) at a price significantly higher than the face value that they, themselves have put on it.  Aka Fraud.

As for the melt value, a few points:
- currency has it's own value, notwithstanding the material it is made out of.  As stated above, copper is more valuable than one cent, but good luck finding someone that will pay you for more than that for one.
- in most places it is illegal to destroy (or melt) currency, so, from a legal standpoint at least, the melt value is immaterial.

Def

[CallsignBadger]

 

[gerleatherberman]

New coins provided by the mint.  I understand antique and collectible items having a different value than what they originally were.

In this case, a coin is marked with a face value of $20, and sold by the original manufacturer, which is a government agency (the Mint) at a price significantly higher than the face value that they, themselves have put on it.  Aka Fraud.

As for the melt value, a few points:
- currency has it's own value, notwithstanding the material it is made out of.  As stated above, copper is more valuable than one cent, but good luck finding someone that will pay you for more than that for one.
- in most places it is illegal to destroy (or melt) currency, so, from a legal standpoint at least, the melt value is immaterial.

Def

Thank you for the clarification, Grant!

Regarding new coins; I don't have any, aside a few pieces of bullion(modern liberty dollars for example) that I received as presents when I was younger. The newest coins I have paid cash for are 64' half dollars

So, with that said, it looks like  with what you wrote.

[Don Pablo]

Maybe they can legally charge a cost-of-production fee?  Just a wild guess, I know nothing about the guv'mint or coins.
It is a LE coin after all....

[pfrsantos]

When facing stuff like that, I awlways say: "Not interested." Things are worth what people are willing to pay for them.

Like fashion and social media stars and the like. My take on that is "thank God some people like that and are willing to give you money. If you depended on me, you'd be starving..."

 

[Etherealicer]

You guys haven't read the reviews, have you? ITS GOOD VALUE!!! IT SAYS SO IN THE REVIEWS!!!
Also its a good gift for children... seems like I'm a cheap smurf when buying gifts for kids (or friends)...

[pfrsantos]

You guys haven't read the reviews, have you? ITS GOOD VALUE!!! IT SAYS SO IN THE REVIEWS!!!
Also its a good gift for children... seems like I'm a cheap smurf when buying gifts for kids (or friends)...

Forget the "Good value".

 

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