2008 Predictions: Gold, Coinage and Politics By David L. Ganz
- December 20, 2007
I have authored this column since
1965, when I became a professional writer dedicated to covering
the numismatic field. At times, I even gaze into the future
of the hobby and the world around us.
In looking through my clips, the first reference
I can find to this line of work is an article that I wrote
on these pages in May 1971, entitled "The unmasking of
a seer." It was never a regular feature of this column,
though I did it from time to time.
Historically, I've spent a lot of time in
the "seer business" when it comes to market analysis.
I've always, for example, predicted the price of gold, silver
and platinum with varied degrees of success. The same is also
true of my famous predictions for 1881-S silver dollars in
MS-65 condition, something I view as a bellwether of the marketplace
as a whole. Less accurate is my plea for Indian Head cents
to be given their fair recognition and representative pricing.
(Okay, finding a 1906 Indian Head cent in pocket change in
1960 changed my life - and yours).
Longtime readers may recall that I've been
involved in politics for virtually all of my adult life and
have frequently interviewed members of Congress on coinage
matters, from both sides of the aisle. In the 1970s and 1980s
it was not uncommon to see interviews with Representatives
Wright Patman, D-Texas, Leonor K. Sullivan, D-Mo., Robert
G. Stephens, D-Ga., Walter Fauntroy, D-D.C., Ron Paul, R-Texas,
James McClure, R-Idaho, Steve Symms, R-Idaho, Senators Mark
O. Hatfield. R-Ore., Peter Dominick, R-Colo., Jacob Javits,
R-N.Y., Jesse Helms, R-N.C., Hubert Humphrey, D-Minn., and
others on pressing issues of the coinage field.
As my own life has changed and evolved, I
became an elected official serving first as mayor of my community
(fourth-largest in New Jersey's largest county, Bergen) for
seven years, and during the past five years as a county commissioner
or supervisor known as a freeholder. My interest in politics
went from local concerns to national predictions and some
very close calls on presidential races in this century (mostly
accurate but finally off by only a couple of electoral votes).
Next year, 2008, is a Presidential election
year and a leap year. It affords a unique opportunity for
being a seer. Before getting to that, however, it might be
worthwhile to revisit my predictions for 2007 (written in
October 2006) before the general election took place.
Predictions for 2007:
1. Political shift. I always write this before
the general election. I may have the numbers wrong, but I
see the GOP losing eight Senate seats and in any event losing
control of the Senate. I see a loss of nine seats in the House
with control staying with the GOP. (If I get the exact numbers,
I want double credit). Paul Sarbannes is out as lead Democrat
on the Senate Banking Committee. He should be replaced by
Chris Dodd, who will in my opinion become chairman.
Let me hedge my House bet and go for extra
credit with a contradiction: Barney Frank will be the next
House Financial Services Committee chair (handling all coinage
matters) and Nancy Pelosi will be the next Speaker. Coinage
subcommittee chair Deborah Pryce, R-Ohio, won't be back in
the next Congress, and will be defeated at the polls.
How the seer did: The Dems have control of
the House and Senate; Pelosi is Speaker, Frank and Dodd are
chairs. Pryce won a narrow re-election victory. Credit for
5 of 6 points.
2. Congress next year will finally pass the
state quarter extension for Washington, D.C., and the five
trust territories:Puerto Rico, Guam American Samoa, Commonwealth
of Northern Mariana Islands, American Virgin Islands. Goose
egg, but see the prediction for 2008.
3. A bill will be introduced in Congress to
reinstitute a $3 gold piece for collectors. Nope.
4. The ANA board will ultimately vote new
bylaws about how its board of governors are elected. There
will be intense debate and a lot of public opinion expressed
beforehand. They may even go with Internet voting. They tried
and failed. (Half point.)
5. Florida United Numismatists will offer
a second convention besides its January one - a June or July
show - to broaden its membership appeal and give the circuit
another show. Yes! (1 point)
6. Precious metals prices will go up in the
next 12 months. Silver will increase by at least 7 percent
to at least $12.70 an ounce at some time during the cycle.
Gold will go over $630. Platinum will top $1,150 sometime
in the next 12 months. 3 for 3. Triple credit. (3 points.)
7. Legislation will move in Congress for consideration
in eliminating the cent, and maybe the nickel, which both
cost more than face value to produce. They are moving (see
new prediction). (2 points.)
8. Look in your bookstores for a slew of new
coin books in the coming 12 months. The hobby of 139 million
people has caught the attention of large publishing houses.
Topics will be diverse. So will the authors. Bingo! (1 point.)
9. Price for an 1881-S Morgan dollar, MS-65,
will top $165 in fair market value. It'll be about time. Result:
Only as MS-66. Goose egg.
10. Indian cents will move: a typical 1906
MS-65 in brown Unc. will go above $110, a movement of 14 percent.
Bingo! (1 point.)
11. Platinum eagles from the U.S. Mint will
develop market scarcity and real numismatic value. Yes. Yes!
(1 point.)
12. If you leave this out and circle it, someone
in your life will make it a "numismatic holiday"
next December (or this one). It could be a book you want,
or coin supply, or even a newsletter. How handy it is to circle
what you want.
Total: 14 of 20 (.700)
So, for the 27th consecutive year, I've brought
out the Ganz Crystal Ball to offer you a window to the future.
A lawyer's caution: take everything that I
write with a grain of salt. My track record in predicting
precious metal prices is pretty dismal - zoo monkeys tossing
darts might do as well - but on some compelling hobby and
other issues, my overall track record borders on the semi-skilled.
Recently it has been better than in years past.
No one has suggested I give up my day job
as a lawyer and local political figure (except for the local
voters who voted for the other guy in the 2005 mayor contest).
This seer business is actually tough and takes
a lot of research, twice. The first is the datum necessary
to read the tea leaves of the future; the other is checking
on what happened in the past. Both are time-consuming, but
also a lot of fun. I hope you enjoy the Swami's musings as
much as the seer enjoys writing them.
In gearing up for this year's article, I drew
on a 2006 visit Kathy and I made to the Oracle at Delphi.
The journey took us 180km from Athens, and took all of three
hours by tour bus. A three-hour tour awaited us, and our guide
Dimitris was too knowledgeable and yapped incessantly with
information that overloaded me en route.
It did not get better at the site, as the
other group lapped us, leaving little time to explore the
magnificent archeological site. In a way, it reminded me of
Machu Picchu and the Inca City of the south.
Dimitris says that Delphi is the center of
the earth, where it all began. The ruins, and the partial
restorations, show it was a magnificent place of veneration.
The archaeological museum was very special, although not air
-conditioned; there, some partial restorations of ancient
sculpture is magnificently displayed. We arrived there the
day before my 55th birthday.
All that by way of preparation, I am now a
better seer for the experience. We'll see if the Delphi Oracle's
wisdom continues to rub off as I make predictions for 2008.
Predictions for 2008:
1. Political predictions. First, California
will retain the traditional winner-takes-all electoral block.
The Democrats will take the White House in a close electoral
vote contest, widespread popular vote. No Supreme Court challenge
this time. My guess is 391-157.
2. Gold is on the way to $1,000 an ounce in
2008. Once $800 an ounce was breached, my crystal ball says
a run on $1,000 is likely. Watch for it.
3. Silver, now around $14.66, will rise to
$16 or more in 2008. There are industrialized reasons why
this is likely; and while $16 sounds high (it is), the price
represents a 9.1 percent rise over the 12 percent in the past
dozen months. My predictions on this metal have been weak
over the years, but I think I have a good view for the next
year.
4. Watch for platinum to rise to over $1,600
an ounce in 2008. The ratio between silver and platinum, currently
100:1 or thereabouts suggests to me that it will continue
into the future. Purchases in China are the reason; as a consumer
nation, they have trusted in platinum more than gold. The
demand for platinum in China - as indeed its demand for copper
- goes a long way to explaining how that metal is now viewed.
Anyhow, watch for a rise of more than 8 percent.5. Congress
is going to try and give up on - or abdicate - its constitutional
responsibilities in setting weight, size and composition of
the nation's coinage - but will retain rights to name the
coin and define its design. Oddly, it will pit Ds versus Rs
- with the Democrats willing to sign rights over to the Mint,
in evident violation of Article I, Section 8, of the federal
Constitution - which gives Congress non-relegable power over
the nation's coin and currency.
6. Watch for hearings and a vote on elimination
of the cent and the nickel - on the faulty logic that it costs
more than a cent to produce the one-cent coin and nearly a
dime to produce a nickel when overhead is added in. The problem
is that the fixed costs never go away; eliminate the lower
denominations and the cost of a quarter goes from 8 cents
to nearly 20 cents. But the end result may be that the metallic
composition of both coins change (not a bad concept if carefully
tested).
The Mint will back a compositional change
- they've expected it for a while - but the seer notes that
they also favor giving administrative authority to make the
change.
7. Lawsuits and administrative hearings are
likely to occur over the use of the word "Mint"
in 2008, now that regulations have been issued to clarify
that in the U.S. Mint's view, no one but it or another lawful
government facility can use the word "Mint" in advertising.
It says disclaimers don't cut it and only make slight mitigation.
The Mint has trademark status on the phrase
"U.S. Mint" and a host of other product names including
"U.S. Mint Proof Set," "Uncirculated set"
and so forth. Watch for (1) the lawsuit and (2) the suit to
cancel the trademarks on the basis that they are longstanding
generic names that have lapsed with common usage.
8. The 1881-S Morgan dollar, MS-65, will top
$150 during the coming year. Call it intuition, a rising market
("all boats in the water rise with the tide") or
a wish and a prayer, but the $115 level now should start to
move. This could be the year.
9. The giant ANA lawsuit involving former
executive Chris Cipoletti and some former ANA employees will
sputter to a halt well before the mid-year trial. My prediction
is that this is one that is going to go away, even if the
ANA has to buy its peace. What a colossal waste of resources.
10. Look for my wall of honor to grow with
some new photographs in the coming year as we go into re-election
cycle. Look for Mint Director Ed Moy to testify at least three
times on Capitol Hill in the coming year. Watch for a clarification
on "first spouse" coinage as the Presidential race
for 2008 tightens. Look for the Industry Council for Tangible
Assets (ICTA) to take on new leadership responsibilities in
the regulatory muddle.
Hope you've enjoyed the "seer's"
predictions. If I get positive feedback, it'll become a regular
feature of the column as I enter my 40th anniversary of my
first article for Krause Publications, in the old "Coin
Shopper" in 1968 and Numismatic News the following year.