St. Gaudens vs. Eagles

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slabinja's picture
slabinja
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St. Gaudens vs. Eagles

Does anyone know there difference between investing in gold coins (Eagles, Krugers) and rare coins (St. Gaudens).  For example, if the spot price on gold were to go to $2,000, would one be a better investment than the other?  Would a St, Gaudens 20 Dollar collectible go up proportionately greater than the Eagle or vice versa?

Thanks for any responses...

 

 

Jarhett's picture
Jarhett
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Re: St. Gaudens vs. Eagles

St. Gaudens are numistics, and you pay a premium for them.  You pay a lot more over spot for these coins because you are paying for them being rare.  However, eagles are bullion and you pay around the spot price for these coins.  In the circumstance that gold will appreciate greatly it is bullion that you want because nobody is going to pay for the numistic value.  Go to goldsilver.com and there is a video that explains this in great detail and clarity.

Here is a link to the video

http://goldsilver.com/formtobuy/

slabinja's picture
slabinja
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Re: St. Gaudens vs. Eagles

Thanks for the video.  From what I understand, the speaker is saying that if a crisis were to occur that only the gold value, not the numistic value, would increase.  On the other hand, he does have something to sell, so I do wonder if there is a bias to his opinion.  It's difficult to believe that the collectable value of certain coins would not be retained.

Jarhett's picture
Jarhett
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Re: St. Gaudens vs. Eagles

Well they might be retained if you can find another person who cares about when the coin was minted.  You have to decide if you want to become a coin collector, or if you want to protect your wealth with precious metals.  All that matters to me is the metal content.  I could care less when my golden eagles were minted, and I know when I sell them back that I will be able to sell them for what the metal is worth.  On the other hand I am not interested in looking for another coin collector who wants to buy a numistic coin.  Also I would rather have more gold for my money rather than a rare coin.  Numistic coins are like baseball cards, and other memorabilia, they are only worth what somebody else is willing to pay for them. 

slabinja's picture
slabinja
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Re: St. Gaudens vs. Eagles

Your point is well taken.  One thing worth pointing out is the idea that pre-1933 by being "collectables" cannot be confiscated by the US government, that is why some people are more bullish on them.  Thanks for you input.

Jarhett's picture
Jarhett
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Re: St. Gaudens vs. Eagles

I have read those articles too, but the logic behind them does not make sense.  Why would pre 1933 gold coins be less confiscatable than a 2007??  I would be very careful buying collector coins because it is very easy to get taken.  Do lots of research before you buy.

Ken C's picture
Ken C
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Re: St. Gaudens vs. Eagles

Guys,

 

If the government decides to confiscate anything do you think that they will not find some "reason" why they can do it. It seems that the usual way of doing things is to declare an emeregency and then issue an Executive Order to effect the desired result.

I don't think that gold confiscation is likely but one never knows does one.

 

Ken

 

slabinja's picture
slabinja
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Re: St. Gaudens vs. Eagles

Here are a few tidbits I found to answer your question.

The reason that pre-1933 coins cannot be confiscated is as follows:

" In 1954, the Treasury Department recognized at last that the time had come to legitimize the numismatic gold market. Consequently, an amendment was made to the Gold regulations, to the effect that all gold coins minted prior to 1933 would subsequently be presumed to be rare and of recognized special value to collectors, without the necessity of further specific determinations by the Treasury. Coins minted after 1933 were still subject to specific Treasury Department rulings, which were to be based on the advice of the Curator of Numismatics of the United States National Museum. All U.S. gold coins and the vast majority of foreign gold coins were thus freed from the overhanging threat of confiscation, and a new era for American numismatics appeared to begin. " [Quote excerpted from a detailed account by Donald Hoppe written in 1970.]

http://www.usagold.com/cpm/hoppe.html

Also, you don't have to report the sale of pre-1933 coins to the IRS, AND there is a capital gains tax of 28 percent on post-1933 coins:

Sales of Pre-1933 US rare coins are non-reportable. We are not required to report your purchase or your sales to anyone. However, the sale of many modern bullion coins over 25 ounces requires dealers to file a 1099-B with the I.R.S. reporting your profits at the time of the sale.
 

http://acoins.com/whatyou.html

For clarifications sake, I am not advocating anyone purchasing pre-1933 coins, although it is a subject worth pondering.  The tax ramifications of selling post-1933 coins alone is worthy of discussion.  As far as selling these coins, most places that move a lot of bullion do sell these coins in addition to bullion, including a few that Chris has recommended as places to buy in his article about purchasing gold.  So selling pre-1933 coins them would not necessarily be like "looking for a buyer," unless perhaps it was an extremely high-prices item (perhaps 19th Century I'm guessing).

 

 

 

capesurvivor's picture
capesurvivor
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Re: St. Gaudens vs. Eagles

I agree with Eagles.

Actually, the most interesting topic re:confiscation that I read somewhere would be an excutive order making it illegal to buy or sell gold, though you could continue to own it. That would effectively limit it's utility as an exchange medium, obviously, without requiring massive searches, etc.

 

SG

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GR8TFUL
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Re: St. Gaudens vs. Eagles
capesurvivor wrote:

the most interesting topic re:confiscation that I read somewhere would be an excutive order making it illegal to buy or sell gold, though you could continue to own it. That would effectively limit it's utility as an exchange medium, obviously, without requiring massive searches, etc.

Typically, the rarer & harder to obtain an item becomes the more expensive it gets.

If the U.S. goverment suddenly dictated that it was illegal to buy/sell gold (something I do not think is going to happen) & began confiscating, I think only a small percentage of gold owners would voluntarily give up their holdings, and people who did not own gold would wish they did. Thus the price of gold would go up.

Yes, at that point it would be technically illegal to buy or sell gold, but since when did making it illegal to do something every actually stop people from doing it? Remember prohibition?

 

Ken C's picture
Ken C
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Re: St. Gaudens vs. Eagles

Since it is currently legal to own, buy and sell gold the government could only restrict it if a new law was passed. I would hope that there would be enough sane people in Congress to stop such a thing from happening. Perhaps that is too much to hope for.

 

Ken

 

capesurvivor's picture
capesurvivor
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Re: St. Gaudens vs. Eagles

I think you could do it by executive order; I believe that Roosevelt did that.

 

SG

Ken C's picture
Ken C
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Re: St. Gaudens vs. Eagles
capesurvivor wrote:

I think you could do it by executive order; I believe that Roosevelt did that.

 

SG

 

1974 a law was passed allowing citizens the right to own gold. Another law would have to be passed to undo that one.

 

Ken

capesurvivor's picture
capesurvivor
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Re: St. Gaudens vs. Eagles

Do we know the limits of executive orders?

 

SG

Ken C's picture
Ken C
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Re: St. Gaudens vs. Eagles
capesurvivor wrote:

Do we know the limits of executive orders?

 

SG

 

Any executive order that the President issues must be based on existing law otherwise it is not worth the paper it is printed on.

However, in the final analysis all it takes is 5 Supreme court justices to say that it is legal. The Supreme court has made mistakes in the past.

 

Ken

 

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