Month: December 2020

There are all kinds of slabs, but today I am going to talk about coin encapsulation by independent grading and certification companies. Surely you have seen coins encapsulated in small plastic cases that bear a short identification of the coin, the grade of conservation attributed to it and an identification number of the capsule. Well, at first it doesn’t seem like a bad idea, because it manages to make a coin with a lot of details about its condition become an object that can be summarized in a number on the Sheldon scale (from 1-70).

Indeed, an attempt is made to objectify a highly variable object, to simplify it for investors without knowledge… and it can be said that they have been very successful, only thus are the important price differences due to barely perceptible changes from MS64 to MS65, or from MS65 to MS66. On the PCGS page, one of these services, they have a price guide, and we can see, for example, that a Morgan Dollar from 1878 Carson City mint goes from being worth $550 in MS64 to $1,500 in MS65 and $4,000 in MS66 . A very subtle difference to most collectors and dealers.

https://www.pcgs.com/prices/detail/morgan-dollar/744/most-active

I know that the market has imposed the desire for better preserved pieces, but I think that I am not the only one who does not detract from the value of the pieces in circulation, and who considers each coin to be a historical witness of a unique moment, and a reflection of those who lived and gave value to that currency. Personally, I have always considered conservation as an important aspect, but above all because of not going back on it. In other words, whoever has an XF coin could patiently take it to an VF, even if it makes no sense, but a VF can never be an XF again… This is obvious, and I think it justifies a differentiation in prices. In addition, there are series that are extraordinary beautiful in MS, and which are far uglier even in AU. For example, I can think of the series of silver Escudos (2.5, 5 and 10) from Portugal from 1932-1951 that, with little wear, already look really bad. But apart from these cases, I think that the evolution of prices in the market is unleashed by speculation. Speculation, on the other hand, fueled by these certification companies, because I am convinced that without them, no one would venture to pay those price differences for such subtle changes. In the end they make speculation possible. On the other hand, they are not perfect… I think this example says it all:

https://www.sixbid.com/en/heritage-auctions-inc/1104/spain/1028747/republic-10-centimos-1938-km756

10 centimos from the Second Spanish Republic from 1938 in MS61… typical forgery to fill in the gaps, of which I myself bought one as a child for 100 pesetas… luckily it wasn’t sold… and not only that, it’s withdrawn from the Heritage website, because it’s a major slip… And this is part of the problem… you trust one of these companies and relax vigilance, and what’s worse, this is a gross fake, but… What if it was a decent fake? By putting it in the capsule, you cancel part of the controls you can do, especially the edge…

Therefore, and as a summary, these companies have facilitated the creation of somewhat clearer graduation standards, since there are already millions of encapsulated pieces out there, and although it is true that there is a certain inflation of conservations (https://www. coinworld.com/news/precious-metals/gradeflation-encourages-mutually-profitable-resubmissions.html), I think overall they have helped improve the picture. But the price is a rampant speculation that benefits the companies themselves and the speculators, making it easier for investors to make entries in numismatics, without the necessary knowledge. And on the other hand, to keep the coins away from the collector who can no longer touch them, and also make it even more difficult to store the collection. For those who are looking for a few valuable coins, it’s fine, but for the crazy ones who like to collect very different things…

Grade is the state of wear in which a coin is. It is the main parameter that affects the price of a coin, and for this reason it has become an element of hot discussion between collectors and dealers. This situation is compounded by the fact that, for many years now, there have been companies that have specialized in certifying the grade of conservation of coins and encapsulating them. I will talk more about these companies in another post, but I have no choice but to refer to them in part as well.

For the moment, it is said that the problem becomes more complicated when one tries to pass the conservation standards from one country to another. I think that much of the confusion for those of us who deal with “international” currency is the mix between American standards and “traditional” Spanish ones (or french, german and even british). In this globalized world, with platforms like Sixbid, Numisbids, emax… etc. that present auctions from all over the world within the reach of a click, this problem has grown. Originally I had decided to use the American system with literal translation, which is what the Standard Catalog of World Coins (KM) proposes in its first pages, where we can find a table like this:

	Proof	Unc.	Extremely Fine	Very Fine	Fine	Very Good	Good	Poor
US	PRF	UNC	EF or XF	VF	F	VG	G	PR
Spain	Prueba	SC	EBC	MBC	BC+	BC	RC	MC
Fr	FB	FDC	SUP	TTB	TB	B	TBC	BC

Really, the Spanish system does not correspond to this conversion as soon as we see a few auctions from Vico, Cayón, Aúreo… In fact, I have included the French correspondence, because it is more similar to ours, and French companies such as CGB have made a more adequate conversion of the scales, which I will discuss below. But to better understand this conversion, it is necessary to talk about the Sheldon scale. In 1949, William H. Sheldon presented his conservation scale based on 70 points, for the correct graduation of American cents. The ANA, the American numismatic association, adopted it with certain modifications and in the 1970s extended it to all American coins. This scale complements by providing more information to the degrees mentioned above. Not all numbers are used, and more or less the sequence is as follows. PO1, FR2, AG3, G4, G6, VG8, VG10, F12, F15, VF20, VF25, VF30, VF35, XF40, XF45, AU50, AU53, AU55, AU58, MS60-70. As we can see, with respect to the simplified table above, we have the FR, or Fair that would be between Poor and Good, then clarify that MS is “Mint State”, and therefore equivalent to UNC, and finally the inclusion of AU, or about uncirculated between XF and UNC. This scale is more complicated to apply due to its complexity and subtlety, especially in the MS grade. And it is here where certification companies such as NGC or PCGS have specialized, extending the scale to all “modern” currencies in the world.

Well, if we look at CGB, its sequence is as follows, M1, AB3, B6, B10, TB15, TB20, TB30, TB35, TTB40, TTB45, TTB48, TTB50, SUP55, SUP58, SPL63, FDC65, FDC70. And as is clear, they have kept the Sheldon numbering. Therefore, we can see that the correspondence table presented by KM breaks down, but we have a more appropriate correspondence to the traditional French or Spanish scale. In it, focusing on the important part, we would have the following table:

	Unc.	About Unc.	Extremely Fine	Very Fine	Fine	Very Good	Good	Poor
US	UNC	AU	XF or EF	VF	F	VG	G	PR
Spain	SC	EBC	MBC	BC+	BC	BC-	RC	MC
Fr	FDC SPL	SUP	TTB	TB	TB	B	B	M

And here we can see one of the biggest problems. When translating literally, many people with no experience in the international market convert EBC to XF, being happy or disappointed, since it corresponds more to an American AU. In the past, I chose to use a system more similar to the one presented by KM, because I thought that they would end up harmonizing below, as is usually the case with these things. We would all rather be told our currency is AU (which literally looks like SC-), than be told what EBC is. But I have decided that it is better to try to explain and adapt the sheldon scale.

On this PCGS page, you can see more about their criteria:

https://www.pcgs.com/grades

In any case, today with the omnipresence of photos on auction web pages, it is true that the indicated degree of conservation has gone into the background for circulated coins, since you can see the photo to distinguish for yourself. But the market has gone crazy on the uncirculated grade (11 grades total on the Sheldon scale, and prices sometimes doubling or more going from one to the other), and that’s where the need for external certifiers, about which I will talk in another post.