Elephant coins

Posted on Wed, 20 July 2011 by Phil Mussell
Posted in: Coin News
Elephant coins Whatever next?

THE recent sale at Bonhams of Alderney’s one off gold “John Lennon” coin for £60,000 (see news and views page 10) had echoes of a similar sale at Stacks-Bowers of an Australian $30,000 gold 10 kilo coin (see COIN NEWS, May 2011) and indeed other sales before that, where coins with mintages in single figures fetch way beyond their precious metal spot price, with results in the tens if not hundreds of thousands of pounds/dollars. The fact that the Lennon coin sold well above its lowly estimate of £2,000 should come as no surprise to most, if only because of the ever-popular Beatle’s connection and the fact the proceeds of the sale were going to charity (the coin had originally been given to Yoko Ono who then donated it for sale to help the Alder Hey Children’s Hospital’s “Imagine” Appeal). But even with these factors taken into account, £60,000 is a huge sum and COIN NEWS contributor Michael Alexander of the London Banknote and Monetary Research Centre and Bonhams auctioneers are to be congratulated on promoting the sale so well. However, the question we are left asking is what, if any, relevance such a sale, indeed such a coin, has on our hobby at large.

There have always been limited edition coins of course. The Royal Mint regularly produce small numbers of precious metal versions of circulating coins and these prove ever popular with collectors who are happy to pay a premium over the spot price to get the latest issues. But such coins are not so expensive that the actual price of them bears no resemblance to the price of the precious metal therein and purchasers always know that should all else fail their acquisitions can always be sold for scrap and they will get a good percentage of their money back. With coins that fetch many, many times their melt value, the purchaser has to rely on a secondary market should they ever wish to sell their coin on and I am left wondering whether such a secondary market actually exists. Of course, it could be argued that the rarity of the coin: the fact that only a very, very limited number exist (usually less than five, often as with the Lennon coin, just one), will in itself be enough to create that secondary market, with certain wealthy individuals always prepared to shell out for unique items to add to their collections. But if this is the case, then what is to stop the mints across the world from producing countless “one-offs”— unique gold or platinum coins to sell on for hundreds of thousands of pounds? Will such results as those at Bonhams and Stacks-Bowers make the mints look again at their issuing programmes and produce more and more such coins just to cater to a few wealthy individuals? You may think this far-fetched, but it is exactly what happened in the phone card market with issuers realising that collectors were eager for rarities, so they started making them to cater for the demand. Soon practically every phone card was a “limited edition” and the market soon collapsed. Those of you who visited the early Dublin shows at Kilmainham Hospital will remember the mania surrounding the phone card business there—visit the Dublin show now and you may find one or two cards around, but they will be selling for a few euros each, certainly not the hundreds (or Punt equivalent) they were a few years ago. Could such a thing happen in numismatics? It’s unlikely perhaps—after all,a large number of coin collectors are probably not interested in that particular market, with the rarities they seek being the small mintages from years gone by. With phone cards it was all a “new issues” market and so could be manipulated, coins aren’t like that but it is worth wondering whether the new issues side of the hobby could fall victim to the same problems. To a certain extent it is already happening, with far more “limited edition” coins being produced than ever before—you only have to look at the new Krause Standard Catalog of World Coins 2001–date to see the vast numbers of coins the worldwide mints produce. Few of them will never be seen in anyone’s pockets or purse but collectors still seem eager to buy such coins and as long as they are the mints will keep striking them. That, of course, brings us round to the second part of the question asked above: what relevance the Lennon coin itself has to the hobby? Yes, it is a coin, it was struck by the Royal Mint, it has a denomination, it’s a proper “coin” as opposed to a medal. But can it really be considered in the same light as a Gothic florin or Shield reverse sovereign? Can it even be considered in the same light as any of the standard “new issues”? Isn’t it rather a golden gimmick—a memento in metal that in effect is a “thank you” for a £60,000 donation to charity? There will be those who argue that is exactly what it is, and the fact that it appeared in the Bonhams Entertainment sale rather than their numismatic auction rather seems to back that idea up. Others, of course, will argue that it is a bona fide coin and should be seen as such, the fact that it is a new issue and a one-off being irrelevant. Both views carry weight and both will have their supporters, but personally I’m just happy to see numismatics in the news and once again happy to be part of a hobby that is so diverse that we really don’t know what’s coming next!

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