Wednesday, October 18, 2006
Coins and Cognac!
Two stories about rare coins hit the media within the last week. The first was about two street peddlers from skid row in Los Angeles who were down on their luck and selling fake coins, specifically a 1796 silver dollar and a 1832 George Washington quarter. Their asking price was a mere $20. Now if these were real it would be the steal of the century. The real 1796-dollar has been appraised at $3.5 million. And the 1832-quarter has not been appraised at all since George did not appear on the quarter until 1932. And they were still wrapped in the exact same protective wrapping valued by coin collectors. But if you are an up and coming young professional could you really turn down an offer like this? No way. Not on your life. True, one might wonder if it were stolen or in common parlance “borrowed.” Put it away and wait. After all that is what bank robbers do in the movies. However, if one chances to come by a few days later and sees that “bum” selling another one of those dollars, one could become a little suspicious. Come back a week later and there is yet another one for sell. Now you are more than a little suspicious. You have been robbed. It is time to call in the authorities. After a tad of investigating the whole affair, the experts announce that your dollar only has 13 stars around Lady’s Liberty head whereas the original had 15. There is no way you will ever get you 20 bucks back. The “authorities,” as Los Angeles finest like to call themselves, soon announced that the coins were replicas apparently minted in the Philippines and readily available in novelty shops but with the wording “replica” attached to the sticker on the protective wrapping.
The next story concerned a rare coin dealer in Ohio who had a once thriving business selling rare coins to the Ohio Bureau of Workers' Compensation. Needing to increase the return on their investment, Ohio officials dropped $25 million in the dealer’s lap. When they got glowing reports about the return on their initial investment they dropped another $25 million in his lap. The dealer began to diversify out of the coin business into other collectibles—probably baseball cards and 1796 silver dollars and 1832 George Washington quarters. Now Ohio officials are not easily hoodwinked. They would occasionally poke their heads in to see their coin collection. They saw lots and lots of coins, but it never occurred to any of them that the coins might not be either his or theirs. Nor did they take time to count the stars around Lady Liberty’s head. After all, he was a steady contributor to their political funds, a respectable businessman and certainly not the type to pull the wool over their eyes. At some point officials got a little edgy and a little suspicious and decided to actually inventory their holdings. They were stunned. Ninety-six percent of the coins in his possession were not his. Their actual holdings were roughly $600,000. Whoa! Reminds one of the story of how to make a small fortune on Wall Street. Start with a large one.
The other big story in the news concerns North Korea’s exploding a nuclear device. For about 48 hours experts jockeyed back and forth over whether North Korea had actually exploded a nuclear device or whether they had faked the whole thing. The real question to be answered was where they got the money for the test—real or fake. The country has very little to export other than counterfeit US dollars—no, not the 1796 silver dollars, the Philippines have a monopoly on that—but currency. They have circulated so many fake bills throughout Asia that many countries will no longer accept any US currency. You can imagine my surprise when I read a headline that North Korea would trade cognac for nuclear weapons. My initial thinking was that they must have been going to soak the market in fake cognac—since fake Rolexes and coach bags were already taken. But no! The story meant to convey the idea that if they continued with their nuclear experiments, they would soon find themselves deprived of cognac. Please note that this does not mean that the French are necessarily lining up with the US on a serious geo-political issue ,but quite possibly that someone actually took a close look at the bundle of US currency they received in payment for their last shipment of cognac. Now one would think that the French would be savvy about such matters. In 1541 Jacques Cartier while exploring Canada sent two ships home, their hulls filled with iron pyrite and quartz crystals, which he had mistaken for diamonds. The French it seems are savvy only when it comes to wine and love.
Two stories about rare coins hit the media within the last week. The first was about two street peddlers from skid row in Los Angeles who were down on their luck and selling fake coins, specifically a 1796 silver dollar and a 1832 George Washington quarter. Their asking price was a mere $20. Now if these were real it would be the steal of the century. The real 1796-dollar has been appraised at $3.5 million. And the 1832-quarter has not been appraised at all since George did not appear on the quarter until 1932. And they were still wrapped in the exact same protective wrapping valued by coin collectors. But if you are an up and coming young professional could you really turn down an offer like this? No way. Not on your life. True, one might wonder if it were stolen or in common parlance “borrowed.” Put it away and wait. After all that is what bank robbers do in the movies. However, if one chances to come by a few days later and sees that “bum” selling another one of those dollars, one could become a little suspicious. Come back a week later and there is yet another one for sell. Now you are more than a little suspicious. You have been robbed. It is time to call in the authorities. After a tad of investigating the whole affair, the experts announce that your dollar only has 13 stars around Lady’s Liberty head whereas the original had 15. There is no way you will ever get you 20 bucks back. The “authorities,” as Los Angeles finest like to call themselves, soon announced that the coins were replicas apparently minted in the Philippines and readily available in novelty shops but with the wording “replica” attached to the sticker on the protective wrapping.
The next story concerned a rare coin dealer in Ohio who had a once thriving business selling rare coins to the Ohio Bureau of Workers' Compensation. Needing to increase the return on their investment, Ohio officials dropped $25 million in the dealer’s lap. When they got glowing reports about the return on their initial investment they dropped another $25 million in his lap. The dealer began to diversify out of the coin business into other collectibles—probably baseball cards and 1796 silver dollars and 1832 George Washington quarters. Now Ohio officials are not easily hoodwinked. They would occasionally poke their heads in to see their coin collection. They saw lots and lots of coins, but it never occurred to any of them that the coins might not be either his or theirs. Nor did they take time to count the stars around Lady Liberty’s head. After all, he was a steady contributor to their political funds, a respectable businessman and certainly not the type to pull the wool over their eyes. At some point officials got a little edgy and a little suspicious and decided to actually inventory their holdings. They were stunned. Ninety-six percent of the coins in his possession were not his. Their actual holdings were roughly $600,000. Whoa! Reminds one of the story of how to make a small fortune on Wall Street. Start with a large one.
The other big story in the news concerns North Korea’s exploding a nuclear device. For about 48 hours experts jockeyed back and forth over whether North Korea had actually exploded a nuclear device or whether they had faked the whole thing. The real question to be answered was where they got the money for the test—real or fake. The country has very little to export other than counterfeit US dollars—no, not the 1796 silver dollars, the Philippines have a monopoly on that—but currency. They have circulated so many fake bills throughout Asia that many countries will no longer accept any US currency. You can imagine my surprise when I read a headline that North Korea would trade cognac for nuclear weapons. My initial thinking was that they must have been going to soak the market in fake cognac—since fake Rolexes and coach bags were already taken. But no! The story meant to convey the idea that if they continued with their nuclear experiments, they would soon find themselves deprived of cognac. Please note that this does not mean that the French are necessarily lining up with the US on a serious geo-political issue ,but quite possibly that someone actually took a close look at the bundle of US currency they received in payment for their last shipment of cognac. Now one would think that the French would be savvy about such matters. In 1541 Jacques Cartier while exploring Canada sent two ships home, their hulls filled with iron pyrite and quartz crystals, which he had mistaken for diamonds. The French it seems are savvy only when it comes to wine and love.
