August 21, 2014 – Last week we reported about the excessive demand for the Golden Kennedy Half Dollar. We asked our readers, whether they had a good explanation for this incredible hype although the US Mint had announced that these commemorative coins will be produced until the demand is met. We have received a lot of responses. Interesting enough nobody who really was involved in this answered: not a single person who stood in line, nor a single dealer who bought these coins. I guess you also will understand why when you have read the comments of our readers.
I saw the line, and it was crazy. Dealers were paying a substantial premium to get Kennedy coins from those who stood in the line. With only a few hours to survey the offerings of dealers inside the show, I forewent the opportunity for a quick profit. Part of the reason for shutting down the sale was that it allegedly attracted unsavory elements to the show, and I heard an unconfirmed rumor that one or more collectors had been robbed in the men’s lavatory. You are correct; waiting in line for one of these coins did not make much sense.
I was at the ANA show in Chicago and planned on getting in line for the Kennedy’s until I saw the line was already there. The reason people were in such a rush to get the coins was that the grading services had special slabs for the first week’s release. These special slabs turned the $1240 coin into a $3000+ coin immediately, so it wasn’t collector interest, it was greed.
Yes, I saw that also and was very perplexed indeed to why lining up the day before to obtain a coin which isn’t enhanced by neither a dated certificate of authenticity nor any other addition of a dated recognition of when it was actually purchased.
One time I witnessed this was in 2009 while I was visiting Warsaw and the Polish Mint, the coins for Father Popewiuska were issued and there was a line outside the National Banks head office to obtain mostly the 2 zlotych and to a lesser extent, the silver issue. I was told this was primarily for the many who felt a closeness to this personality who gave his life in the defence of democratic principles when the country was still ruled by the communist party so I accepted this explanation.
A second time I witnessed a line-up for a new commemorative coin was during a visit to Copenhagen and their national Bank. A new 20 kroner proof coin in a continuing series was being issued and many were there from the early morning looking to buy their allotted number, I think 3 to a customer. I also asked why this was the scene as I wasn’t aware that the coin was terribly important as it was part of a “Ships” series and was told “Oh, they’re not all collectors, many of them here this morning will put them on e-bay today and try to get more money for it”
I think with the hype about the coin which was also in the mainstream press & media, many saw this as a golden chance to obtain this item and flood the auction sites with this, and the earlier, the better – of course, not thinking about the fact that there is no sealing on the mintage and all orders are promised to be fulfilled.?? Perhaps its a case of anything to make a buck, I’m still looking to see the outcome on this one…
An article online said that a dealer offered $20,000 for the first four Kennedy Half Dollars. So a team of 4 arrived at 11pm the day before and waited all night til sales started the next day. They were successful in buying the first 4, and the dealer said he would pay them. Is $20,000 worth standing up all night?
What also should be mentioned about the Kennedy Gold Half sale in Chicago, was the ANA found a way to get into the profit making. All those who on line who received a voucher to purchase the coin also had to purchase early entrée entrance into the show and in order to get in early they also had to be or become ANA members.
Little is also said about those waiting all night and not being rewarded. Only 500 per day but well over a 1,000 on line, means a lot of disappointed people spending a night in line for nothing.
The reason that people were willing to wait in line for up to 12 hours to purchase this new coin from the U.S. Mint was profit! The mint had announced their plans to sell 500 per day during the ANA convention last week in Rosemont, Illinois. The two major grading services would “slab” (encapsulate) these first 2500 total coins with a label that stated they were “First Release” coins (or something similar). As a result, there were several dealers willing to pay $3300 to the buyers of these coins, which represented an immediate $2,000 profit. For many of these people, if not most, $2000 is a large sum of money, and hence the reason for the long lines. In the end, it is a bit of “tulip bulb” mania!
Since the mint suspended the sale of the coin, due to security problems with the long lines, they ended up only selling 1500 coins last week in Chicago (Rosemont).
The issue with the Kennedy halves is that the grading services will put special labels in the slabs indicating “early release” or “ANA convention release,” and idiots will pay BIG MONEY for those labels. The Baltimore release of the gold baseball coin showed that. Maybe now the tulip craze will pass and we can go back to collecting instead of speculating. But the first few pieces sold at ANA-Chicago brought $5000 or thereabouts to the holders, before any grading company had even seen them.
Joseph E. Boling
In case no one has told you yet, the reason for the long line and rioting over the Kennedy Half Dollar coins was that some US coin dealers were paying people $50 each to stand in line and buy the coins for them, which were being carefully distributed on a “one coin per household” basis at about $1500 each. One of these coin dealers, whose temporary employees were walking around with special green t-shirts advertising to buy the coins, sold the first coin for $100,000. It is a crazy game, and the rest of us dealers at the show were quite upset about it because it drew in thugs and drug addicts from the Chicago ghetto who ended up robbing two people at gunpoint during the show. I fault the ANA for allowing this, the US Mint for their single-purchase policy, and most of all the unethical US dealers for putting all of us numismatists at risk. I hope it never happens again!
Our reader M. G. informed us about an interesting blog featuring an ardent attack on those dealers who bought the coins for exorbitant prices. If you want to read all the details behind the story, click here.