Why Do Collectable Coins Even Have A Face Value?
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- čas přidán 16. 01. 2024
- Today we take a look at why our collectable coins have a legal tender face value despite their collectable and intrinsic value far exceeding the attributed face value.
Let me know what your thoughts are in the comments!
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As a monarchist, I must say that the effigy reflects our culture and history as equally as the reverse design. Coin collecting is only a recent development in comparison to the use of any currency and designs have come and gone. There aren't many people who can say they've seen, least of all held, an Edward VIII coin. Most people have probably never held a coin with a king's effigy until the new Charles III coins are released. Then you get to George III, the first King of Australia and the last King of America. It will be a rare occurrence for anyone to hold a Richard III coin or even a Cromwell republic coin. It's all history and as present day turns into history, it will be the effigy that will also drive our great grandchildren and great great great grandchildren to hunt for their own respective unicorn coins in the future.
It's certainly an incredible thought to hold coins from centuries past and consider the journey those coins have taken which led them to your hand!
Thanks for watching! ☺️
swapped a junk penny worth 20 cents for 6 beers at the pub...that's true worth and value 😎🥳
You sure it wasn't a 1930? 🤣👍
The face value feature is what differentiates a coin from a round or a medallion.
As for why some collector issues have a different country of issue, it comes back to design requirements for the country who actually wants to issue it.
The mint of the producing country actually pays a commission to the country which is shown as the country of issue in exchange for rights to issue the coins.
For example, Australia wants to issue a collector’s coin, but the design does not fall within Australian design legislation. The Cook Islands decides to take the issuing jurisdiction place on the coin in exchange for a commission charged to the Australian mint per unit sold in order to allow the coin to be issued legitimately. These collectors coins may never end up going to the Cook Islands despite stating as being issued by them. These commissions are actually quite a fundraiser given these country’s small economies.
Thanks for watching Justin! ☺️🥳
Always a wealth of knowledge, thanks for the education 🙆♂️. Btw, I’m always thinking about the British sovereign, it doesn’t have a face value, but everyone associate it with a pound 🤔.
Another great video Matt, keep it up.
Thanks for watching mate! ☺️
Very educational! Thank you!
Thanks for watching T!! ☺️🥳
High level - there is a limit to the total value for a mint to use for printing sovereign coins, these dollar amounts are purely nominal to qualify as legal currency.
I don't believe the limit idea is correct after speaking with a friend at the mint although the face value figures being miles off the actual value of a coin is definitely intentional ☺️ thanks for watching!
I said this on the other video you referenced at the beginning of this video.
I was under the belief that the mints had to apply to the federal government for permission to mint the coins and they are given a value amount that they are allowed to mint. By that I mean the government may give permission for the Perth Mint to manufacture, and this is just to keep the math simple, $1 million worth of coins. This means the Perth Mint could produce 1 million $1 coins. If the face value was increased to $2 per coin they mintage would be reduced to 500,000 coins. By producing 500,000 coins the production costs for the mint would increase and cut into their profit plus they get no benefit from making the face value $2. It all comes down to economy of scale. The more you make the less it cost to make.
Also there was a situation in England a short while back where they produced a 1 kilo ( I think it was ) silver Coin with a face value of £500. The silver content , and much like the Australian 50 cent piece, was worth less than the face value of the coin so people were buying them at the cost of the bullion, going into the bank and getting the £500 face value and making a profit from cashing them in.
That’s my interpretation of why. I’m probably wrong. It won’t be the first or the last time I am.
Thanks for watching! I've just checked with someone at the mint and whilst I see the logic, that's not how the mint operates with coin production of non circulating releases 🤓
Thanks for watching mate!! 🥳
@@ThompsonsCoins someone’s been telling me porky pies. Thanks for telling me. 👍🏻
Thanks for another interesting video, and for making me smile :)
Thanks for the great question!! It was a lot of fun to make this one ☺️🥳
The reason why coins remain in circulation or not has to do with Gresham's Law. Governments make a profit known as seigniorage whereby the face value of coins intended for circulation should have a higher denomination than the cost to produce them. However, if the intrinsic bullion value of the coin's metallic composition is worth more than its face value, then according to Gresham's Law those coins will be hoarded and disappear from circulation. On the other hand, if coins are made from low cost metals such as Aluminum, Zinc or Steel, etc. and have a face value perhaps as high as $100, then they will be used in circulation similar to how banknotes are used. If precious metal coins such as Silver or Gold have a low face value such as $1, then they will not be spent as money and will instead be collected for their valuable intrinsic bullion content.
Thanks for watching! People will always hold onto items of perceived value that's for sure! ☺️🥳
Interesting Video as always Matt! But a point I thought of at the beginning of your video is how are Chinese New Year coins and Chinese myths and legends coins etc. Produced by both the Perth Mint and Royal Australian Mint Australian legal tender?
These themes have no major ties to Australian culture and heritage.
Also I know it’s been a long time since the 1980’s but the RAM did have the $200 gold series for quite a while as well.
I believe the coins were bought at roughly $250 (for uncirculated) with its gold content valued at about $200 at the time too.
So I’m guessing laws have changed since then? Or is that just something not done anymore?
Finally (lol), I thought another reason why mints had to use other countries as legal tender on there collectable coinage was because.
There is a maximum amount of coins that can be minted as Australian legal tender for each mint yearly.
For example Perth mint produce a lot more coins then Royal Australian Mint, hence why a lot of there coins (both Australian and other themes) sometimes have different counties legal tender.
I might be wrong with that point but that’s what I was told.
Enjoyed listening to you speaking with passion.
I agree re the obverse, I said it when the 1oz waratah from RAM was in my hand.
More design, less King.
Thanks
Thanks so much for watching Sym! I hope you had a great Christmas and I look forward to more of your videos this year! 🥳
I should add, that if the Niue Government did request collector coins to be struck, it would be conducted by the Mint of New Zealand and that's because there are contractual obligations and agreements in place.
Basic answer is they are non circulating coins as you mentioned but having a low face value is for the intention to keep them out of circulation as who would pay $150 for a coin only to spend it for $5?
What you didn’t explain in the video is for example the recent 14 coin set coins RRP of $235 are $2 that could been broken up & spent as $2 coins.
Annual year sets are often broken up as a $1 or $2 coin collectors may want a specific coin that is only available in a set so they break it open for the coins they want & may just use the discarded 5-10-20-50c coins as spending money which is why the odd coin appears in circulation.
I had hoped people already knew that the coloured $2 coins were still $2 coins 🤣 you're absolutely right though although similarly I don't expect to see any of them in a till based on the high premiums paid to get hold of them!
It was always sad back in the day of the cardboard mint sets, seeing them cut up with scissors to get one coin out of them!
Thanks for watching! ☺️
@@ThompsonsCoins unlikely the $2 coin sets would be broken up except for people who prefer them PCGS graded in slabs.
But yes back in the day & to a lesser degree today with some sets in acrylic slabs some get broken open for a specific coin or two
I didn't notice your pink tongue at all, until you showed us all. Sovereign Hill is a great place to visit for a number of reasons.
One day I'll have to share the tale of how I almost lost a finger at that bowling alley! 🤣 I've got mixed memories of that great place!
😆@@ThompsonsCoins
There is another reason, for instance a Silver Kangaroo has a face value of 1 Dollar but if the silver price went to zero (the only way this could happen I think is if an asteroid filled with silver crashed into the Earth) then the Kangaroo would still be worth 1 Dollar, but anyone that had bought silver bars or silver rounds would be left with completely worthless silver (these do not have a face value). The face value is a government guarantee of value for capital gains tax. (There are asteroids floating in space that contain so much gold which could seriously cause the gold price to tank, I mean, time for everyone to gold plate their houses and furniture!!!)
Hmm I think even in the asteroid scenario, you'd still find they would trade for greater than $1 based solely on the costs associated with production of coins. Most collectors are happy to pay significantly higher prices than intrinsic values for whatever it is they are collecting.
But I'll be sure to keep one eye on the night sky for any potential action!! 🥳
Thanks for watching!
@@ThompsonsCoins Very good, I am a true collector also, I have been to a local observatory and I have seen Saturn and its moons but I was looking for asteroids also and I did ask them if they could pin point one for me!!!
Speaking of "flora and fauna," any updates on the Australia Wildflower series? Seems like they did the Waratah and then forgot about the series.
No news yet unfortunately! But I'm sure they'll pick it up again, hopefully sometime this year! 🥳
Very late to this video but still found it very interesting. I can see a case for shrinking the monarch's effigy in limited, well-deserving cases but otherwise I can never understand why people are so keen to get rid of it. If you really want change, it is the Australian animal designs on the reverse of the circulating coins which need updating after 30-60+ years in use. The "culture" everyone is so keen to make more space for by shrinking or removing the monarch's effigy usually doesn't have as much long-term historical significance as we seem to think it does at the time. Will future archaeologists really be excited by 2023 Matildas $1 and $2 coins? Upon seeing ACDC coins will they think first of the band or the role of electricity in our civilization? The King/Queen's head places a coin firmly in its time after we are all long gone more than any fancy new obverse would.
Been to sovereign hill and got the rainbow drops they were delicious! Are you gonna sell some coins at the next anda show?
Thanks for watching! I'll be running the event so unfortunately, I won't have the time to be operating my own table 😭 but there will be a heap of cool stuff there!
Great video as always. As far as the size of monarch… I think you know where I stand. Coins, especially collector coins, can and should be used to highlight something amazing about the theme of the coin and/or the culture, heritage, or nature of the issuing nation. Many coins recently have played with this idea and it has worked fantastically. I am all for that being the standard.
I think this has always happened for a few thousand years. The ancient Roman coins were also semi-religious items, messages to the people, news of the day and much more for instance.
I'm still waiting for the opportunity to make some high level contacts and get you that advisory gig at one of the mints over here! 🥳 Thanks so much for watching!
That would be life altering...@@ThompsonsCoins
Those are all awesome themes that would be lovely to see! @@SouthSideFrankie
Nice 😊😊😊
I wonder what happens when/if you did deposit the coin, what they do with it? Would they keep it in circulation as another $1 coin, know what they have and swap it internally for a $1 coin, etc.
If I worked at the reserve bank I'd be swapping a $1 coin out of my pocket to get hold of the silver proof coins 🤣 but it's a great question, I'm not entirely sure! Perhaps something for me to discover next visit to Sydney!
@@ThompsonsCoins It would be interesting to know cause obviously the staff would know what they have and could easily ex change it before its in the system, but also there must be a system in place that says they need to put aside and then what? :)
Anyway keep up the content! Great little channel and I know what its like as we are similar size.
🤘🤘🤘
Thanks for watching!! 🤙
Do you think that with all these jewellers and hobbyists turning thousands of 50 cent silver rounds into rings, the price of these will sky rocket, or will it still stand on quantity of mintage?
So the Mars from Phobo in a legal tender coin but not a token but not circulated and not Australian. It's face value is 1 dollar but it's Silver value is 2 Oz of silver more than $1 for it's Silver content. You also send up with a Purple tongue if you eat Mulberries.
Got it.😮
On ya Tommo
Could you go overseas say and take a bunch of gold NCAC
Too the face value of ten grand and not declare it?
Is it legal to melt down a round 50c? Isn’t that defacing the currency?
Check out the round 50c video I did which is linked in the description 🥳🥳😊
@@ThompsonsCoins excellent, makes me wonder why people pay the bullion value for something it is illegal to reduce to bullion form
and a Red tongue if you eat Raspberries.😮
Matt is your nickname. “Waffle” by any chance.
the 1 cent coin is worth more than 1 cent
Reason for face value - tax minimisation for the wealthy.
I use my silver coins at the strip club this way the girls only need to declare $1.00 on their tax