Over the last few years, telemarketers have been importing European bullion gold coins dated before 1933 and claiming they, like old U.S. gold coins, would be legally beyond the reach of the government in another recall. The imported coins most commonly promoted as non-confiscateable include:
- French Twenty Francs (both the Roosters and the Angels);
- British Sovereigns (usually with the images of Queen Victoria or Edward II or George V);
- Swiss Twenty Francs (also called Helvetias);
- Belgium Twenty Francs (a.k.a. King Leopolds); Swedish and Danish 10 Kroners (Mermaids);
- Swedish and Danish 20 Kroners; Dutch 10 Guilders.
Investors should avoid European coins. As noted in my earlier articles, the notion of “non-confiscateable” coins has no merit, and dealers promoting European coins do so because they provide bigger profits. That’s bigger profits for the dealers, not their clients.
European coins are not worth the high prices promoters ask. Regardless of the dates on them, they are not “non-confiscateable.” Additionally, they hold little, if any, numismatic potential. It is a peculiarity of the coin collecting that coins are prized by numismatists (coin collectors) only in their countries of origin. Americans collect U.S. coins; the British collect coins of Great Britain; the Japanese collect Japanese coins, etc.
Furthermore, the European coins are often compared with old U.S. gold coins, which can and do achieve premiums at times. European coins, as a rule, are simply bullion coins and will never attain genuine numismatic premiums. Some of the coins have been around for a hundred years and have always sold at only a few dollars above the value of their gold content. That is why telemarketers promote them. They buy the European coins near bullion prices and mark them up, ensuring big profits for themselves.
Still, there are other reasons for not buying European coins, even when you can get them at reasonable prices. First, they contain unconventional amounts of gold, such as .1867 oz, or .2354 oz, or .1947 oz. Americans prefer full ounce coins, or fractions of ounces they easily understand, such as 1/2-oz, 1/4-oz, or 1/10-oz.
Second, Americans prefer coins stamped in English. The European coins, obviously, are stamped in the languages of their countries of origin. But perhaps worse, the European coins do not have their gold content stamped on them. If you have to use such coins in an emergency, how are you going to convince someone other than a coin dealer that the coins contain the gold content you say?
Your best buys in fractional-ounce gold coins are American Eagles, Canadian Maple Leafs, or Krugerrands, although fractional-ounce Krugerrands can be difficult to find at times. These coins have their gold content stamped in English and come in sizes Americans are used to dealing with. Always, these coins are cheaper than promoted European coins. Even when you find European coins at bullion prices, fractional-ounce Gold Eagles, Maple Leafs, or Krugerrands are comparably priced. There are no compelling reasons for Americans to buy European coins. Americans should buy Gold Eagles, Maple Leafs, or Krugerrands.
All Things Considered – John’s Commentary:
In years past, I was guilty of buying these same coins from England, France, Austria and Germany. They seemed “unique” and “novel”. I don’t have them any longer. And, I did not recoup the greater premium I paid to acquire them.
Remember one of the cardinal rules of buying precious metals – all premium on coins eventually disappears. Said another way, gold and silver are commodities. When you melt them down, they all look the same – and all the “unique” and “novel” reasons for which you bought them has disappeared.
Don’t get fancy! Keep your purchases to plain vanilla, bread and butter, good ol’ everyday gold and silver bullion.
If you already have them in your possession – fine. You may, however, wish to swap them for silver at some point in the future when the Gold:Silver ratio becomes more favorable. See our website to learn more about the Gold:Silver ratio at:
http://www.fisherpm.com/GoldtoSilverRatio.html
