After The Gold Rush

Gold at $700 an ounce? Eureka! There's gold in them thar hills! There's nothing like a run up in price to remind everyone what glitters.

I had an urge to dive into bidding for the cheapest polished half eagles at first. But I've done that before, and in the end I had a pile of coins I didn't really want that I sold and broke even on. If I was serious I would spend serious money - cash out a CD and buy a pile of Krugerrands or other bullion coins. But there is hindsight to consider. In light of what we know now, gold was a reasonable alternative at $250/oz (or $60, or $32, if you look back far enough), but is it reasonable now at $700? Maybe. Maybe not. Time will tell. I just know its not my thing to speculate in metals with retirement money.

In the meantime I still have this gold fever. I can remember being hit by it first when I was in college in California. Driving up to Yosemite, along obviously disturbed creekbeds, and past historical markers reporting giant strikes. It occurred to me right then that we could use another pie pan in the kitchen. When I got to the counter at the jiffy mart the clerk started laughing and said "Don't let anyone jump your claim!" There was no gold panning that day. There was later, in Idaho. Working 30 minutes in the hot sun to get a single flake smaller than a pin head. In the end I concurred with Mark Twain, who spent a whole week panning gold before deciding to become a journalist and write about gold miners and their jumping frogs. Panning for gold does not satisfy the golden urge. Not the way coins do.

Something that stays with me from those days is an appreciation for how the old west grew through boom and bust. It was cash on the barrelhead, and cash was usually scarce. For a long time I've collected coins from that era. Carson City's at first, but as time went on the coins of San Francisco became more interesting. First the halves, then the quarters, and finally the gold when I could afford it. And what a deal the gold turned out to be. In the VG-VF range I'm looking for, I can find an early S-mint quarter or half eagle for the same price as an S-mint Seated quarter of equivalent grade, at no more than double the gold melt price. Now the quarter may be the rarer coin (most of the early S quarters have NGC populations under 30 - the number of coins without problems is tiny), but I don't really care whether the coin is an R-3 or an R-6. Most of these coins, gold and silver, had mintages below 100,000, and as a result of the scarcity of hard money, they show it. They carry the honest wear which can only be attributed to thousands of former owners with sandy pockets. For me these battered coins are the real McCoy. They're living history. I'll take any of them over the more common rarities (1901-S Barber quarters, 1916-D dimes, and especially 1938-D walkers). Being western I'll even take them over southern gold or colonials (though I would not turn down an authentic Pine Tree shilling).

Lately these coins have not been hard to find. Maybe some people are cashing out their less-desirable pieces with the run-up in gold price. Fine with me. One man's trash is another man's treasure.