My Gracie once bought a box of old used greeting cards at a rummage sale. I thought it was a waste of fifty cents, but in one of the old cards she found twenty bucks. A profitable day — now, take that times ninety gajillion, and you have what happened in Houston.
A Texas scrap collector hauled off a locked mystery safe. Nobody knew what was inside, but he promised to return the contents to the previous owner if anything valuable turned up.
Well, what turned up was over two million dollars in gold coins. What is it about plumbing pipes that encourages people to store coins in it? Anyhow, the happy ending is that the original owner of the coins got their safe back, and the scrapper got a heavy-ass safe. Everybody wins!
Just look at this work of art: Robert Wechsler designed many different pieces of art for The New Yorker earlier this year, each made from actual, valuable coins:
Whenever something like this comes out, people develop hives and stutters: ”WAIT — HE CAN’T DO THAT! That’s destroying money, and that’s illegal!”
18 USC Chapter 17 of the US Code has a section called “Mutilation, Diminution, and Falsification of Coins” — ‘Mutilation’ is about the only thing going on in the art above, and it continues on to say:
Whoever fraudulently alters, defaces, mutilates, impairs, diminishes, falsifies, scales, or lightens any of the coins coined at the mints of the United States…Shall be fined under this title or imprisoned not more than five years, or both.
The word fraudulently appears in both paragraphs, and is the key to this: the reason this law exists is a layover from the days of coins being made from precious metals. Like the reeded edges on coins, this is meant to prevent people from altering their coins to be more valuable. Let’s say you go to the bank and get a thousand dollars in gold coins. Now, you take each coin and you put it against the bench grinder, taking off a thin layer around the circumference. You do this to all 50 double-eagles, and then you take them back to the back and deposit them. Now you’ve got a grand in the bank — and a pile of gold dust underneath your bench grinder.
So, you got $20 for $19.99 worth of gold, plus it introduces “more” gold into the system, which potentially affects the value of the dollar.
Taking some pennies out of circulation for the purpose of art, or a cute memento of Disneyland, isn’t illegal because you’re not doing to fraudulently alter the value of the coin. Try melting nickels and pennies for profit, that’s gonna get you a visit from federal agents. So, intent is all part of the game: make art of pennies and sell it for hundreds, but don’t try to squeeze copper out of your pocket change. They might feel the same, but the rules view the two very differently.
Note: I’m not a lawyer, nor am I your lawyer, so this post isn’t a legal defense. So, don’t print this out to show the judge when somebody arrests you for skirting the law.
It has been six months since my last review of eBay gold prices, so here’s the skinny on the current price of gold, as taken from a sample of actual eBay closed auctions for known gold coins.
|Coin on eBay||April Avg||Oct Avg||% Chg|
|20 Franc Rooster||$320||$271||-15%|
|10 Franc Rooster||$204||$194||-5%|
|Average per oz||$1819||$1714||-6%|
|Actual Gold Price||$1425||$1335||-6%|
Lookit there: eBay has been pretty much spot-on, on average, with the actual spot price of gold over the past month. 28% seems to be pretty consistent as an eBay seller’s premium, so be sure you’re figuring that into your calculations.
I came up with $1,335 as an average price of gold for October, but one should note that mid-month gold dropped to about $1275 before bouncing back up into the $1350 range. Also, note that in April the $10 US gold coin was the outlier; this month the 20franc coin had a bigger change than the others. It’s only a sample of two, but you might want to consider sticking to the less-volatile smaller gold coins if you want your gold to remain steadier on the eBay market — and watch the larger coins for fluctuations that you can take advantage of.
Coins might not be precious metals anymore, but they seem to be more “money-like” than paper bills. Plus, they come from the Mint, not the Treasury, so they’re more closely tied to specie money than a greenback. So it’s quite a surprise when people get arrested for paying for things with nothing but coins:
A Chinese couple were arrested in Paris, France, for paying their hotel bill entirely with Euro coins. In fact, they were paying for everything in Euro coins, which aroused suspicion and the hotel called the police. There was nothing illegal about paying for things in coin, of course, but the hotel thought they had discovered a counterfeit ring who were too dumb to not hide their operations. Turns out, the couple were salvaging coins from junked cars, and had saved up for a nice trip. I hope the arrest was only a slight detour.
Scrapped Euros are actually a problem: Euros are “destroyed” by separating the bi-metal contents, but entrepreneurs in China have been buying the components and reassembling them into “genuine” coins. They still count as counterfeit, but they defeat most detection so the French hoteliers were right to be a little bit suspicious.
A Utah man found himself on the wrong side of the law for paying a $25 medical bill — in pennies. Once again, the pennies weren’t the problem: the man was cited for disorderly conduct because, well, he was doing it just to be a dick. Others have done it successfully, well, sorta, so much that it has attracted the attention of Snopes.
So, the moral of the story is: there’s nothing wrong with paying for things entirely in coin, but you’re going to attract attention — so be prepared for the fallout.
You’ve probably heard of Bitcoins before, but even with a close understanding of how encryption works and the idea of wallet chains that tracks, but yet doesn’t track, the Bitcoin, it’s all a ‘bit’ confusing. Because a Bitcoin is little more than, well, bits on the internet, there’s nothing physical to hold in your hand, jingle in your pocket, or get in a birthday card from Grandma. Well, maybe in an eCard, but that’s a pretty sophisticated Grandma if she’s sending you fifty bitcoins in an eCard for your birthday.
Old-school Grandma can now send you bitcoins in the real-world now, too: a handful of hackers have developed a bitcoin change machine, built into a suitcase. They brought it with to DefCon as a fun toy, but they ended up sparking quite a bit of interest.
The BitCoin Briefcase lets you insert regular coins, and then prints out the proper value in BitCoins as a QR Code. It sorta sounds like the reverse of the laundromat coin changer, but there’s something even more similar out there. You know those Coinstar coin counting machines, sitting over by the distilled water dispenser and Stanley Steemer display at the grocery store? Nearly every one can dispense giftcards, and some can even convert pocketchange to PayPal balances.
So, BitCoin might not seem all that innovative, especially when you compare the fact that, with ECH and online bill pay, most people never see a dollar sign on paper ever. But, let’s go back to a BitCoin’s existence.
A BitCoin is a small sequence of characters, which represent a certain value of BitCoins, which exists and is verified to have value by the BitCoin mining process. The mining process is essentially a mathematical process, and not one based in regulation or law. As such, once a BitCoin exists it is about as individual an object as a metal coin. Your dollars may get sent to PayPal, but they exist in PayPal only as long as PayPal chooses to acknowledge they’re there and allow you to have access to it. Stealing, devaluing, or counterfeiting a BitCoin is inherently difficult, if not impossible.
So, let’s go back to the BitCoin Briefcase: they’re doing something one better than CoinStar. A CoinStar funds a debit account with a business, and the status of your balance is at the whim of the business’ discretion, the agreement you made in funding your account, and any applicable laws. A BitCoin, however, is permanent, immutable. Its value might change, but so does gold; an ounce of gold is still an ounce of gold. So, a BitCoin is still a BitCoin whether stored on a computer or printed out as a QR code, but a “dollar” on an Amazon giftcard is a bit fuzzier. The BitCoin Briefcase might be a fun toy, but it’s a demonstration of something that a dollar isn’t. Even if you convert a BitCoin from one form to another, in theory, it does retain its inherent value as a BitCoin.
Amazon has officiallly launched its own micropayment currency, called Amazon Coin. Currently, one ‘coin’ is worth a penny, which makes it somewhat simple for calculating the exchange rate. It is designed for buying digital content for the Kindle, from books to apps, and customers buy or earn Amazon Coin in order to load their account.
With a name like “Amazon Coin”, there’s sure to be comparison to the BitCoin phenomenon, but they’re nothing alike. Getting an Amazon Coin will be akin to sticking a $10 into the arcade token machine and getting forty brass tokens to stick into the pinball machine. A Coin is worth one hundredth of a dollar; when the dollar fluctuates, so will the Amazon Coin. Calling it a ‘coin’ is a bit of a misnomer; in the business world, internet currencies are “tokens” or “coupons”; only governments make coins. But, whatever symantics Amazon thinks having online coins will avoid scrutiny from governmental entities is their own problem.
So why even call a “Coin” something different? Why not just call them Amazon Gift Cards – which are already a thing, a way to get your money into Amazon in bulk to use for smaller transactions. One thing about it being a “Coin” is that it becomes a purchase transaction, rather than a gift card which is increasingly regulated as persistent storage for money. I’ll bet that there will come a day when app developers and participation in the Mechanical Turk will have the option of being paid in Amazon Coins. This makes Amazon a barter-world: you do work that earns Amazon real money, and in payment you get tokens to spend at the Amazon store. Sounds a bit like company scrip, don’t it? Scrip isn’t horrible, as long as it isn’t misused. Amazon isn’t dumb enough to require all transactions to be made with the same virtual money system, but if they did they wouldn’t be the first to try and restrict payment options.
The other benefit for Amazon, aside from giving free Coins when buying the tokens, they can just hand them out willy-nilly without using coupon codes or other odd redemption processes. If you own a Kindle Fire, you’re getting $5 in Amazon Coin just for free, to encourage the use of the system. Go ahead and spend them, but be careful when converting your dollars into Amazon Coin: be aware of what you’re getting for your money, like any other product you might buy.
So, the price of gold dropped precipitously a few weeks ago. One of the selling points that nearly every gold seller makes is that “gold coins tend to retain their value when the price of gold drops.” So, I decided to test it. When I was researching my “rooster” post a couple months ago, I took down some average prices of gold coins on eBay. It’s not particularly scientific, but eBay can show you closed auctions and what they sold for, so you can put together a sample of 50 or a hundred retail sale prices and get a picture of actual money paid for a coin.
Since then the price of gold dropped, so now I had a good use for the data: if I look today, a few weeks after the fall, will I see coins still priced about the same as they were pre-fall, or a softer fall, or no fall at all? Here’s the numbers:
|Coin on eBay||Feb Avg||Apr Avg||% Chg|
|20 Franc Rooster||$345||$320||-7%|
|10 Franc Rooster||$221||$204||-8%|
|Average per oz||$1993||$1819||-9%|
I sampled coins from a space of about three weeks, from just after the big drop, and I got the “average per ounce” based on the actual gold content of each coin.
When I sampled coin prices in February, the price of gold was $1591 an ounce, and had been pretty close to that through the sample period. The price of gold has changed significantly in the past couple weeks, but we can see how close eBay stayed to the price of gold by using our average loss per ounce from eBay and see how close to the actual numbers we are.
Well, now, that looks like a pretty even cross-section of prices that an ounce of gold went for over the past few weeks, doesn’t it?
At first glance, my reaction was, “woah, gotta buy some cheap $10 gold coins”, but like I said, I was rather unscientific: it’s likely that when gold hit the bottom, people went for the big coins first, and the average for $10 is a bit skewed versus the smaller 10 Franc coins which saw less of a drop. What this sampling should show is that gold prices on eBay, and prices of gold coins in general, don’t necessarily keep their value when the market price of gold drops. Coins are an easy way to be certain of how much gold you’re getting with a degree of protection against fakery, but it isn’t safer than a gold fund or buying bars of bullion from somebody.
(Footnote on the price per ounce on eBay: eBay coins on average carry a 20% to 25% premium, according to my sampling. Keep this in mind when buying – you pay more on eBay than at your corner coin shop)