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Mandela Coins - Big Crash Coming!

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Little Miss Muffet

Was it 4 or 5 Million R5 2008 coins minted for circulation compared to 10 million 1994 inauguration coins.

The demand for mint and uncirculated inauguration coins is high.

How many 2008 coins do we come across in change? I have been given 1 in 3 1/2 years so crash they may but think of the long term investment.

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Pierre_Henri
Was it 4 or 5 Million R5 2008 coins minted for circulation compared to 10 million 1994 inauguration coins.

The demand for mint and uncirculated inauguration coins is high.

How many 2008 coins do we come across in change? I have been given 1 in 3 1/2 years so crash they may but think of the long term investment.

 

There is no long term investment here.

 

When Mandela dies the value of these coins will come crashing down on us like the Victoria waterfalls - thousands upon thousands R5 coins will be offered in the newspapers, websites, bla-bla-bla ,,,,

 

When the last German tourist bought one each for the little boys back home in the Alps with no clue who Mandela was - the Claus, Hans and Frederick back home in Dusseldorf, MILLIONS of Mandela coins will remain unsold....

 

No Sipho or Jacob over here in SA will stand in to buy them - the market, I think, will crash the day when Mandela dies and almost EVERYONE with 1000s of R5 Mandela coins stored somewhere will start to try selling them on the internet or wherever

 

That day is going to be our own little 1929 Wall street crash ....

 

Pierre

Edited by Pierre_Henri

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jwither
Was it 4 or 5 Million R5 2008 coins minted for circulation compared to 10 million 1994 inauguration coins.

The demand for mint and uncirculated inauguration coins is high.

How many 2008 coins do we come across in change? I have been given 1 in 3 1/2 years so crash they may but think of the long term investment.

 

What "investment"? The fact that a coin does not appear in change in and of itself means nothing as to its scarcity or demand. Were these coins even released into general circulation? Or did people just start hoarding them from the beginning under the fallacious idea that they were "rare" and therefore "valuable"?

 

In the United States, the legislature authorized the "Presidential" dollars. Problem is, the public has repeatedly rejected a dollar coin and does not want it. So these coins do not circulate. They just sit in bank vaults and at the central bank or US Treasury. But even if they did circulate and were more popular, given the number, they would be as common as the sand on the beach except as "conditional rarities", maybe die varieties and error coins.

 

Change a few descriptors and details and what I described is exactly what exists for the 2008 Mandela and that 1994 5R coins. Currently, there are already over 130,000 Mandela Birthday 5R in the NGC census and mostly in grades of MS-65 to MS-67. Given these numbers, there is no "investment" and never will be.

 

If anyone claims that there is, then they have an entirely different definition of "investment" than what is reflected in actual experience. There is no basis to believe, except for the niche markets that I listed, that the 2008 Mandela or any similar coin is or ever will be worth a substantial premium on any sustained basis. Or if there is, I would like to hear it because I do not believe that anyone can make a case for it.

 

The best evidence to support my comments is to compare this 2008 Mandela coins to those which are approximately equally common in the census. The only coins to my knowledge that have a census pop that large are common date US Morgan dollars issued from 1878 to 1921. Taking a date like the 1881-S, this coin sells for about $100 or R800 now in MS-65. However, it is a crown sized silver coin from the United States and has vastly more actual "investor" and collector demand than the 2008 Mandela. There is no comparison.

 

Mandela's portrait on a coin makes a difference, but in and of itself there is no reason to believe that everything and anything associated with his image or name should be or is going to remain valuable no matter how common it is. That concept contradicts basic common sense.

 

Ultimately, I expect that most of these 133000 coins in the census are going to sell for the standard NGC grading fee of $19 USD or even less. Maybe they already do now for grades below MS-65. Given how common this coin is in grades below MS-68, why would anyone care if it is graded or not? And why would anyone pay more than a nominal premium over face value for it? In actuality, there is no reason to do so at all. It was a only a mania mentality that explains how so many people were fooled into believing it.

Edited by jwither

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Little Miss Muffet

We snuffed at inauguration coins.Why are uncirculated inauguration selling at such high prices then?

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jwither
We snuffed at inauguration coins.Why are uncirculated inauguration selling at such high prices then?

 

I am even less familiar with this coin than the 2008 Mandela. But when you say "high" prices, what grade or grades are you talking about?

 

I just took a look at the NGC census and as of today, the count is 6451 for all grades, 277 for MS-65, 60 for MS-66 and TWO for MS-67. There are also a substantial number (over 1400) in AU-58 and about 2000 in all grades below MS.

 

If the mintage was actually 10MM as I understand from your prior post, then the first difference i see is that maybe a lot more of them actually circulated. Likely most of them or at least most that were released into circulation given that the "investment" market for South African coins was essentially dead in 1994 but prices had exploded by 2008. From what I know, for whatever reason, relatively few of the 90th BD coins have done so.

 

Secondly, if the grades you are referring to are either MS-66 or MS-67, the latter are "conditional" rarities and the former are nearly so. So though that is irrelevant to me, it is to others who care about higher numbers on a piece of plastic which somehow to them make a coin that is otherwise as common as the sand on the beach desirable.

 

For a grade of MS-65, I can somewhat understand that it would receive a large premium because possibly there are a lot of actual collectors who want this coin. Personally, I expect that most of them are still speculators but maybe I am wrong.

 

For grades of MS-64 and below, even assuming that zero additional coins are left to be graded, those numbers are simply too large to justify any significant premium at all. Moreover, the census is not complete or even close to it. Even if only 1% of the original mintage remains (which is absolutely not true), that would still leave 100,000 and most or a disproportionate number in MS grades up to and including MS-65.

 

Lastly, maybe the historical significance of this coin gives it a bigger premium. In my opinion, regardless of the fact that it does not have the Mandela portrait, it's more signifcant than any of the Mandela coins. And maybe there are a disproportionate number of the majority population who want it for this reason.

 

If so, given its likely availability, that would justify a NOMINAL premium versus other RSA and most other post-1994 coins, but no more. I would still expect prices to crash if they are over inflated relative to their actual scarcity.

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Little Miss Muffet

No nickel plated steel coin can compare to a gold or good old silver coin. They even feel good.

The fact remains "Where are these Mandela coins that were supposed to be put into circulation"??

In the same way as the inauguration coin that went into circulation but was hardly seen in circulation.

Everything crashes at some time.No matter how long it takes the Mandela R5 birthday coin or any recent Mandela coin

will always be sort after to a certain degree.

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jwither
No nickel plated steel coin can compare to a gold or good old silver coin. They even feel good.

The fact remains "Where are these Mandela coins that were supposed to be put into circulation"??

In the same way as the inauguration coin that went into circulation but was hardly seen in circulation.

Everything crashes at some time.No matter how long it takes the Mandela R5 birthday coin or any recent Mandela coin

will always be sort after to a certain degree.

 

Your statements imply that most of the 1994 Inaguration 5R coins no longer exist or are available and that somehow, this makes them above average candidates for "investment". You cannot prove that statement and no one can because there is no basis for it. To determine why, let's answer these questions:

 

Were these coins melted? If so, how many? My answer is, zero or nowhere near proportionately to make any difference whatsoever to alter this coin's (or any other like it) "investment" potential. Given the change in government at this time, the SA Mint would probably have been tasked to get as many of these coins out into circulation as possible. I do not know this for a fact or if it happened that way, but I make this claim based upon a common sense application of how politically minded people tend to act generally. This change in design would have represented the new pluralistic society in your country.

 

Were the mintage records wrong? Maybe, but even if they are overstated by up to 100 times (I prospect I would assign a virtual ZERO probability to), the coin is still not remotely scarce. This would mean that 100,000 were struck and the census already records 6451. Given it's recent vintage and the fact (pointed out by you) that they have (relatively speaking) hardly circulated, the vast majority are still going to be in their original state or somewhere near it, as the census populations also support.

 

Why they apparently have not widely circulated, I cannot answer that and it is not necessary for me to do so to refute the unsupportable case that they are in any way scarce because they are not. Even if no additional coins were available to grade, for which nothing whatsoever exists to support such a claim, the coin would still not be remotely scarce.

 

Comparing the census populations of this coin to that of US circulating modern coinage, this 1994 5R has an equivalent or vastly larger population than practically any of them. The primary difference between the two is that, either the Mandela coin mania partially spread to these issues which vastly inflated their prices. Or, there were simply a lot of financially clueless people who submitted them for grading. Nothing else explains why anyone would submit such a common coin for grading in the grades represented by the census. Of the 6451, only 349 are MS-65 and above. These are the same grades as most US circulating moderns. I do not believe that any coin like this is worth the bother of grading, but even if I did, certainly not coins graded below an MS-64 or MS-65.

 

The bottom line on coins like these are as follows:

 

If someone wants to collect them because they collect SA coins, RSA, post 1994 coinage or specific issues, then by all means collect them.

 

But if anyone is trying to imply that these or any other similar coins have potential as "investments", outside of "conditional" rarities, die varieties, mint errors and (maybe) toned coins, the claim is completely spurious. Outside of those who have already hit the lottery by participating in the prior mania, the only real opportunity to make money in these coins is to find a raw coin and get it into a holder for sale to someone that participates in one of the four niche segments i just listed.

 

That is it. Everyone else is mostly going to experience one of the following outcomes. If they are stuck with coins they bought at exorbitant prices during the mania, they are never going to recover their outlay, certainly not in purchasing power terms. And if they buy these coins as "investments" outside of the niche markets I listed even at any "reasonable" price, the most logical outcome is that they will make not make much more than average appreciation for RSA coins generally or that their "investment" will be "dead money".

Edited by jwither

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Little Miss Muffet

I am speaking mainly from keeping R5 birthday coins that were acquired at face value.

I have never bought or intended buying any Mandela coins other than at face value.

As I said a good old silver or gold coin "Tickles my fancy"

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Vertigo

Hi All ,

 

The only " BMW's "(btw : Both BM's and mercs have depreciated less than the R5 of 2008 in MS over the last 2 years :biggrin: at least you'll get half your money back on the car )

 

Coins with potential "recovery"/growth (only pertenant to the topic ie: Mandela Coins )

 

* The R5 of 2000 in PF65 and above (Not Prooflike)

* The R5 of 2000 in MS only

* The R5 Inaug of 1994 in MS only

 

I have a bit of faith in the Mandela SR1 (and De Klerk ) in PF69 and PF 70

 

All the rest have "crashed" and/or reached critical trading levels , and would not be suprised if they drop furthar

 

Just my five rands worth ...... (pun intended)

 

Greetings to All

 

Thanks for the well overdue topic to Ewaan & Team

Edited by Vertigo

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