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GROOVIE MOVIES

Modern commemorative circulations coins

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GROOVIE MOVIES

Hi all

 

It's that time again... Another Madiba R5 is being released, and only time will tell whether it turns out to be a winning horse among it's investment predecessors!

My question is what are your hopes of getting this coin in circulation? And I don't mean going to the bank, I mean getting this coin in every day change?

It seems whenever a modern commemorative coin is released, even though they are minted in high numbers, they are almost immediately removed from circulation. I would say the only coins that saw real circulation were the sports 50cents in the early 2000s as well as the 10 years of democracy R2 in 2004 and Union buildings R2 from 2012. These coins were commonly found in you change, and were well circulated, though their mintages were probably much higher than those of the special R5 (I haven't bothered to check).

I was fortunate a few weeks back to get my first Griqua R5 when I purchased something from the corner shop and it only took two years to find me! Last week I struck gold again when I got the OR Tambo R5 at the supermarket, and it still has lots of luster...

Now all special release R5 have mintages above 5million and are by no means scarce, but it seems the reality is that it's near impossible to get these coins in change. Over the years I've come across two or three presidential inauguration, one madiba smiley, one madiba 90th birthday, and the two coins I mentioned before. Other's I've received from friends and I admit that some I have purchase beyond face value. 

When you see coin adverts on facebook, there are thousands of people who post comments requesting details and directions for places to "change these these coins" and are often upset when they aren't met with a response. Many don't understand numismatics and that their coins are only worth face value, but they hold on to them for dear life. On one occasion, this company (probably a scam to begin with) advised people to visit SA coins headoffice to "change their coins" after being hassled by hundreds of facebook comments. I find the thought of hundreds of people pitching up at SA coin with their R5 humorous to no end! 

All of this being said, I wonder if the time will come when people give up on these coins and put them back into circulation or if they will simply hold onto them and pass them on to the next generation for keeps sake. 

Any thoughts?

 

regards Robert

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jwither

Sounds to me that the reason you don't see these coins in circulation is because:

1) South African Reserve Bank doesn't distribute the coins evenly or only in a limited manner.

2) "Insiders" have first access.  To give an example from the US, the 1931-S (San Francisco mint) cent has a recorded mintage of 866,000.  Most exist today and probably in average grade of AU because it was hoarded from day one.  My understanding is that someone was able to acquire a disproportionate percentage of the entire mintage directly from the Mint and this coin saw only limited circulation.  Since then, it has been viewed as a "key date' and sells for an outsized price for it's survival rate, even though the coin is incredibly common.

As for the rest of your comments, I don't believe what you describe says anything about actual interest in collecting by the general population.  It's probably due to the national mania (which is exactly what it was) with the 2008 90th BD 5R.  These coins are almost certainly being hoarded in the hope of realizing a potential windfall, even though the number who realistically made one with the 90th BD 5R was nominal while many more lost money.

My prediction:

1) There won't be anything close to a repeat of the 90th DB 5R mania with any of these coins for as long as it will matter to anyone reading my comments.  That was a "one shot deal", just as the TPG induced bubble for Union and ZAR that coincided with it.

2) Eventually, the public will get tired of these coins and dump them back into circulation, at least as long as 5R even buys anything.  Many will also be forgotten entirely and left in change jars or whatever South Africans use to store their spare change.

3)  To the extent the coins haven't been released into circulation by the SA Reserve Bank, it might sit in storage indefinitely, just as occurs in the US with one dollar coins which the public doesn't want to use.  Silver Morgan dollars sat in storage for 40 to 75+ years until released by the GSA in 1962.

None of this will make any difference to the future financial potential.  I see no realistic possibility that any of these coins will ever be worth any meaningful amount to anyone reading my comments.  With mintages of 5MM, even if 99% disappeared, the coins will be far too common for the size of the real collector base and have far too low of a preference among collectors.

If anyone wants to collect these coins at face value or for a nominal premium, I'd do so but not for financial reasons.

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GROOVIE MOVIES

I think you are correct in your statement that most of these coins could be held by collectors by the bag full. One need only look on bidorbuy, full reserve bags up for sale aren't a rare occurrence at all.  Some coins like the Johannesburg world summit R1 or the 2014 20years of freedom R5 I've never even seen or held physically. The 90years commemoration of the SA reserve bank R5, I've only ever bought uncirculated.

The problem is what people don't realize is inflation is South Africa is very high, averaging 6- 7 % annually. The 10cent has become the new cent and all lower denomination coins are no longer minted or circulated, except for certain banks that insist on giving you exact change (I was once given a two cents with a serious face). A few years back a R5 could buy a chocolate and further back even a loaf of bread. R5 airtime was also very common for cell phone data. Today there's not much that can be done save to pay car guards or beggars, so it's going to be a bitter pill to swallow for all those people who have a jar full of these coins when they finally come to terms that the coins are face value.

However if money reaches a certain depreciation, I think people are inclined to not spend it at all. We might see these coins spur on a new interest in numismatics or collecting when the next generation gets these from their parents. 

regards Robert

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Pierre_Henri

The Mandela R5 series - starting in 1994 with the inauguration R5, brought many new collectors into the hobby.

Every week the Sunday Times and Rapport newspapers would in those days, have an advertisement published, telling the greedy that a coin in the series sold for R500 000 -- so hurry up and start "investing" in Mandela Coins.

But 99% of the greedy bunch burnt their fingers horribly and left hurriedly.

Now (hopefully) only the real collectors are left and yes, there is a place for Mandela coins - as long as these coins are collected by collectors as collectible pieces and NOT as investment pieces.

I mean, how on earth can one complete a RSA R5 collection without the Mandela related and other commemorative pieces included in your collection?

Pierre

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jwither
4 hours ago, GROOVIE MOVIES said:

I think you are correct in your statement that most of these coins could be held by collectors by the bag full. One need only look on bidorbuy, full reserve bags up for sale aren't a rare occurrence at all. 

However if money reaches a certain depreciation, I think people are inclined to not spend it at all. We might see these coins spur on a new interest in numismatics or collecting when the next generation gets these from their parents. 

regards Robert

There is no reason to believe that hardly anyone (if anyone at all) offering these modern circulating commemoratives by the bag are or ever were collectors.  Collectors may own duplicates of coins they like.  I own many even in better grades and these coins are actually scarce or rare. However, no real collector owns dozens, hundreds or even thousands of such as common coins.  These sellers are speculators or acquired the coins for speculation.

Will these coins generate future interest in actual collecting to any meaningful scale?  It's an open question but I doubt it and the answer is almost certainly "no".

I am aware of no evidence to indicate that this type of coinage has increased anything other than casual collecting at face value.  It's still collecting but as in the US, not what most existing collectors care about when evaluating the "health of the hobby".  It won't do anything to increase the price level just as it won't here in the US which is what most collectors really care about.

As in South Africa, in the US there has been a lot of change in circulating coinage since the State Quarters program was introduced in 1999.  It increased the collector base and with it the price level maybe temporarily until 2006 but has since fizzled out.  Unlike South Africa, part of the change after 2006 is probably general economic conditions since the US is a mass market. 

But regardless, what it really proves is that the public and existing collectors don't find these coins compelling and with the decreasing price level in both countries, most collectors don't have a strong enough affinity for what they collect to hold on to it - much less continue to buy more - when their collections are losing value.

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GROOVIE MOVIES
13 hours ago, Pierre_Henri said:

The Mandela R5 series - starting in 1994 with the inauguration R5, brought many new collectors into the hobby.

Every week the Sunday Times and Rapport newspapers would in those days, have an advertisement published, telling the greedy that a coin in the series sold for R500 000 -- so hurry up and start "investing" in Mandela Coins.

 

I remember in the late 90s the 1994 R5 was the coin to be had. As I mentioned, I probably came across two, the third one in recently nogal!

Unfortunately all these newspaper and magazine adverts have created a misconception among South Africans that all old coins are valuable and must be kept until the end of days. It's surprising to see people with hoards of nickel and copper coins in bad condition, that don't even have face value anymore as they have long since been replaced by the third decimal series. I once showed a friend a 1969 silver rand that I used to keep in my pocket and his reply to me was, " but you going to have to wait years and years before it becomes valuable". He didn't understand the concept that the coin had bullion value above face value as it was 80% silver. It's this "wait for years and years, until the coin is really old" that's mindset that many have. 

But yes to respond to you comment, how do you complete a RSA R5 collection without Madiba related coins? It was in fact the few Madiba related R5 coins and other commemorative R2 that were the only coins in my collection and kept the embers alive until I picked up the hobby again in 2015.

Regards Robert

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GROOVIE MOVIES
9 hours ago, jwither said:

Will these coins generate future interest in actual collecting to any meaningful scale?  It's an open question but I doubt it and the answer is almost certainly "no".

I am aware of no evidence to indicate that this type of coinage has increased anything other than casual collecting at face value.  It's still collecting but as in the US, not what most existing collectors care about when evaluating the "health of the hobby".  It won't do anything to increase the price level just as it won't here in the US which is what most collectors really care about.

As in South Africa, in the US there has been a lot of change in circulating coinage since the State Quarters program was introduced in 1999.  It increased the collector base and with it the price level maybe temporarily until 2006 but has since fizzled out.  Unlike South Africa, part of the change after 2006 is probably general economic conditions since the US is a mass market. 

But regardless, what it really proves is that the public and existing collectors don't find these coins compelling and with the decreasing price level in both countries, most collectors don't have a strong enough affinity for what they collect to hold on to it - much less continue to buy more - when their collections are losing value.

To be honest Mandela coins are becoming old as we getting to the point where it seems government is trying to deify the man. We've already honoured him on coins, and almost all modern silver coinage as well as paper money. I feel it's unnecessary to bring out the new bank notes with Madiba on both sides and across all denominations. Yes I would be excited to get the new coin in circulation, but that's because these commemorative coins are near impossible to get in change. However there are other aspects of South Africa that could grace our business coins. I was a big fan of the Griqua R5 was released for general circulation. Not only was it a beautiful design, but it showcased part of South African history that very few are familiar with.

With regards to your US state quarters program, I once lucky to be given a Ohio quarter. I was under the impression that these circulated at face value...? I see the same thing happened in Canada with their super heros series that were struck in silver but with a face value of the silver content at the time. So when the price dropped, many cashed in their coins at the banks to avoid losing their investment, leaving the banks with all the coins. 

I was watching a video as well about the US two dollar bill, where it was said that the bill isn't scarce at all. But thanks to this people misconception that it is, it keeps being removed from circulation, and thus appears to be rare just is the case with our Madiba R5.

regards Robert

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dcdoberman

Hi there

I don't think these coins are scares I've seen them all multiple times as change and I rarely use cash (I live in pretoria) and if I was in the habit of keeping them I'd have a sack of it.

When I'm in the USA I tend to use much more cash as I don't like using my credit card at every little dodgy town I'm in, and I can tell you I've seen all those state quarters as I tend to keep them for the laundry machines. I seen any number of those large nickel dollars too , as they are dispensed as change at subway auto ticket tellers and they really are a big large pain.

My point is we tend not to use cash , and if we did we would see a lot more of these coins in circulation. 

I think you'll see all those 5 rand coins in the next 10-20 years and they'll probably be use to make some sort of artworks or doormat because they wouldn't buy anything at all.

Regards

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GROOVIE MOVIES
9 minutes ago, dcdoberman said:

 

I think you'll see all those 5 rand coins in the next 10-20 years and they'll probably be use to make some sort of artworks or doormat because they wouldn't buy anything at all.

Regards

Like the 5cent pieces. Everybody has a jar filled with cents laying around...

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jwither
5 hours ago, GROOVIE MOVIES said:

To be honest Mandela coins are becoming old as we getting to the point where it seems government is trying to deify the man. We've already honoured him on coins, and almost all modern silver coinage as well as paper money. I feel it's unnecessary to bring out the new bank notes with Madiba on both sides and across all denominations. Yes I would be excited to get the new coin in circulation, but that's because these commemorative coins are near impossible to get in change. However there are other aspects of South Africa that could grace our business coins. I was a big fan of the Griqua R5 was released for general circulation. Not only was it a beautiful design, but it showcased part of South African history that very few are familiar with.

With regards to your US state quarters program, I once lucky to be given a Ohio quarter. I was under the impression that these circulated at face value...? I see the same thing happened in Canada with their super heros series that were struck in silver but with a face value of the silver content at the time. So when the price dropped, many cashed in their coins at the banks to avoid losing their investment, leaving the banks with all the coins. 

I was watching a video as well about the US two dollar bill, where it was said that the bill isn't scarce at all. But thanks to this people misconception that it is, it keeps being removed from circulation, and thus appears to be rare just is the case with our Madiba R5.

regards Robert

I'm providing this response to your reply above and dcdoberman.

Having circulated since 1999, the State Quarters and the subsequent American the Beautiful quarters predominate in circulation.  There are more of these quarters now in circulation than the preceding eagle reverse design which was struck from 1965-1998.

The State Quarters program was a big success the first few years as there had been no design change in any circulating denomination since 1964 when JFK replaced Ben Franklin on the half dollar.  There are those circulating dollars which have and continue to change (more recently issued continuously since 1999), but people here prefer one dollar notes and will continue to do so until it is eliminated.

A program like the State Quarters can or will increase collecting when new but the since 1999, the US Mint has issued five new quarters every year and the five cent and one cent pieces have changed numerous times also.  I have been a collector since 1975 but since I don't collect US coins anymore and hardly ever use coins to pay for anything, I can't even tell you what all of the designs are on US circulating coinage.  If I can't do it, think how confusing it is to the non-collector? 

With new designs being introduced all the time, the novelty effect no longer works and the public has lost interest.  I presume many new collectors still start from circulating coinage since this has always been true here but it is certainly a lot less than at the beginning of the State Quarter program.

Assuming the public even paid any attention to these new coins earlier, this is likely what has happened in South Africa as well.  Like the US, most circulating coinage has virtually no purchasing power and doesn't buy anything, so it is disproportionately a one way trip from the mint to the public's change jars.  Since coin collecting is far less prominent in South Africa than the US, I doubt there are many new collectors resulting from this coinage.

As for the Canadian superhero coinage, those are non-circulating legal tender, otherwise known as NCLT.  I can't even tell you how many designs exist or what they are worth but it doesn't surprise me if they end up getting exchanged for Canadian $20 notes.  I consider this coinage a gimmick, don't believe any serious collector wants it and don't believe the affinity by those who buy it will last either.  By now, there must be thousands of recent NCLT in both silver and gold, including both South Africa and the US. 

Years from now, I expect most of these coins to be mostly forgotten and sell for nominal if any premiums to the metal content, lost in obscurity.

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