Most currencies are Fiat Money, not backed by a commodity (like Gold and Silver) but backed by the government that printed it.
Fiat money is a currency without intrinsic value established as money, often by government regulation. It has an assigned value only because the government uses its power to enforce the value of a fiat currency or because the exchanging parties agree to its value.
If the government behind the Fiat currency becomes insolvent, or acquires extensive debt, their currency may be devalued (relative to other Fiat currencies), their ability to borrow money will be affected (lenders will demand higher interest rates because of the risk), and prices will climb as the currency loses value. At present, Venezuela, Argentina, Zimbabwe, and other countries are suffering due to the inflation they are experiencing. Venezuela is even considering making their own cryptocurrency, the “Petro”, as a solution to their problems.
Bullion coins have, at their base, the smelt value of their base metal (e.g. Gold, silver, etc.). Even though we consider Bullion to be Silver or Gold, Copper, Platinum, and Palladium are all used in coins. You also have to consider the purity of the product – 24 karat gold? .999 Silver? Alloys are often hard to spot, unless you use a test kit . (link to Amazon)
The general rule of thumb is to never clean coins. Ever.
This is particularly important with valuable coins, because a speculator might clean the coin to improve it’s worth – but most cleaning actually is visible to coin graders, and such attempts actually reduce the coins value. But there are times to clean a coin, and consider the best way to handle them – look at this from the internet:
If you are considering selling the coins, definitely do not clean them; store them separately and bring them to a dealer for appraisal. If your coins have sentimental value, souvenirs of a trip, or a gift from a friend, preserve them in a holder or frame, and clean them if necessary – the sentiment is worth far more than the coin.
There is nothing wrong with wiping your coins with an athletic sock or polishing cloth, as these do minimal invasive damage to the coin. You may also want to polish a coin that is deteriorating due to corrosion or oxidation – consider it’s value before attempting this, cleaning can actually diminish the collectible value of the coin if done harshly or with strong chemicals.
After you polish your coins, reduce any further damage by keeping them in plastic holders or traditional coin flips.
If you are unsure as to clean your coins or not, bring them to a coin dealer and ask! Most are helpful professionals, and have a wealth of knowledge. You can also get an idea from these sites on coin grading, especially when dealing with a coin you suspect has value:
The Westin St. Francis Hotel washes it’s coins, and has an employee dedicated to the task! “Rob Holsen is the coin washer at the Westin St. Francis Hotel, and perhaps the only coin washer on Earth. He said the hotel on Union Square started washing its coins in 1934 when the general manager noticed a woman’s white gloves getting dirty.” From NBC news
Several caveats; Don’t clean the coins, Keep them together in some boxes and handle them with white gloves or a sweat sock to keep finger oils off the coins. Take pictures of them to send to a remote appraiser and to establish that you had them (proof of ownership). If you are going to keep them, organize them into coin flips and tubes, and make notations on the contents, condition, and dates. Consider getting a safe, to keep them together and secure. (coins can weigh a lot, too – keep that in mind).
Selling to a reputable dealer, collector, (or pawn shop) is the fasted route to liquidating your collection for cash. Keep in mind that these buyers are looking for values below market, to reduce their risk and make a profit on the eventual sale; you may be offered between 10 and 70% of the retail value of your coins.
If you have the time and ambition, you can use the internet for valuing your coins, and sell them on your own. Craigslist, EBay, and some of the popular coin sites (forums and for sale sections) are your best options.
Many public libraries have books on coins and periodicals on prices, that you can access for free.
I buy and sell coins on EBay and from individuals, at estate and yard sales. It’s a fun hobby for me, especially when both parties feel they got a good price!
You will need to understand coin grading, as there are many valuations for coins based on condition (grade). Circulated coins (pocket change) are not worth as much as graded and certified “Mint-State” coins.
The cost of producing United Kingdom coins varies according to the specification of each denomination. The value of metal in each coin accounts for a large part of the total cost, but it is also necessary to take into consideration the broader costs of the manufacturing process. These vary according to the complexity of the coin. The Royal Mint does not reveal exactly how much it costs to make specific coins as such information could be used to its competitors’ advantage.”
While there is speculation that mints worldwide have similar issues to the US, I will focus on US coins. It is generally acknowledged that the mint spends more on manufacturing pennies and nickels than than they are worth.
The coins (and notes) are minted to be as unique and resistant to copying as possible. As such, many of our minted coins are made of valuable metals vs. cheap alloys. sometimes these metals exceed the value of the coins. Even “cheap” metals, like zinc (used as a filler to reduce the copper content in a penny) have increased in cost over time.
Production is in the US, by Federal employees, paid on government pay grade. Private companies and other governments may be able to produce cheaper coins, but these are not backed fully by the US Government…
US Coins have a lot of detail (detail = expense) to prevent counterfeiters and criminals from stamping out copies of US Coins. This extreme attention to detail (like seeing President Lincoln sitting in the Lincoln Memorial – see penny below) is visible under magnification. “The Lincoln cent (or sometimes called Lincoln penny) is a one-cent coin that has been struck by the United States Mint since 1909. The obverse or heads side was designed by Victor David Brenner, as was the original reverse.” – From Wikipedia
If you click on it, the penny image will open in a new tab, and you can magnify it further using your browsers zoom settings.
By Alan Chenkin, Novice coin collector (numismatist) and hobbyist
The bane of any coin collector is the smell that can haunt some of your coins. No one wants smelly coins, but there must be a way to manage it. Not wanting to suggest you Fabreeze your coins (Don’t do it), I did some digging on the web:
There also may be a reaction between the coins and your hands that creates an odor, related to the conductivity of the coins and their PH .
Best suggestions here are to wear gloves, keep the room well ventilated, and wash your hands before and after. In the “Old days” of coin operated slot machines, your hands would be black from the dirt on the coins, and every casino would have a cup of moist hand towelettes for cleaning it off your hands.
If it sounds to good to be true, it usually is. consider buying a test kit if you are buying gold and silver; GOLD TEST KIT
When you acquire and store collectible coins, just wipe any dirt off them with special coin cleaning cloth (an old sock), and put them in a “flip”, coin book or folder. If you want to get a child or teenager into collecting, you can get them a whole kit from Amazon or eBay.
Coin collections start to grow quickly, so you need to keep them in an orderly fashion.