Investing in Gold by Allen Rowe: Yesterday’s treasure or today’s trap
January 22, 2010
Counterfeit coins have been around almost as long as coins themselves. In the early years most coins were only worth as much as the metal they were made of, so fakes were relegated to copies made with inferior metal to the original.
Today coins are worth more than their metal value, so fakes are more lucrative to a counterfeiter.
Counterfeiters have several different ways of making fakes. They can alter the date or mint mark, splice two coins together, or just make the coin themselves. Coin grading companies have stopped a large part of these fakes, but now they are becoming targets themselves.
The reason for writing this article is that lately there has been a rash of counterfeits coming into the market. Most of these counterfeits are coming out of China and through popular online auction sites. I have just returned from the Florida United Numismatics convention in Orlando, one of the largest trade shows in the country, where I was privileged enough to look at some of the new counterfeits coming out of China.
For years the wave of fakes and forgeries has been growing and with it so are the techniques the counterfeiters are using.
At first much of what was being produced were fantasy pieces, coins that were never made with a particular date and mint mark combination. From there counterfeiters went into producing low level fakes. Wrong sized or non-precious metal planchets were dead giveaways for these pieces.
But soon the counterfeiters were using precious metals and spending extra time to make them the correct size and weight. Most of these pieces were easy for experts to detect as the die characteristics were all wrong for an authentic piece. These fooled many novices, but not many experts.
Today two new threats are reaching the market. First are die-struck counterfeits where high quality fakes are being produced from laser cut dies. It takes an expert to discern these fakes. Using knowledge of minute die characteristics is the only way to ferret out these counterfeits.
Secondly counterfeiters are now targeting the grading services themselves.
Recently a batch of counterfeited certified coins hit the market. Two genuine coins were used to make one fake coin, which was then housed in a counterfeit certified holder.
The example I saw was a 1904-S Morgan dollar in a fake PCGS MS64 holder, worth about $5000 if real. The coin was really a 1904-O dollar, a $30 dollar coin, with the back shaved off paired with a 1879-S dollar, a $35 coin, with the front shaved off. The two coins were then glued together and put in a fake PCGS holder. This would fool many collectors and lower level dealers.
If you are buying coins, especially if you are buying them through the internet, be very alert to these threats. Relying on experts in the industry will help you navigate through these potentially costly traps being laid out in this newest wave of counterfeits.
• Allen Rowe is the owner of Northern Nevada Coin in Carson City.