Three types of note inflation in online auctions

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We’ve heard of note inflation over the years when it comes to coins held by PCGS and NGC. For example, coins in older plates are said to sell at higher prices because buyers believe that reusing them will bring more value.

I don’t buy this coin trader hype and have written about it a few times in the Coin Update news. Here’s an article from 2011. In this one I actually cracked older holders just to get the same or lower grades.

I won’t write about that today.

Increasingly, I see bidders paying PCGS/NGC “invisible” prices for obviously inferior coins. These can be raw or held by sub-companies. Sometimes the auctioneer will simply throw out a high note. Sometimes they add adjectives like “superb gem” or “super gem”. At worst, they add a PCGS/NGC retail value to one of these hyped coins.

Today we look at some examples.

The 1896 Morgan dollar pictured above may have been cleaned and has edge marks on the cheek and hair. I’ve put the rating at MS-63 and wouldn’t bid on it anyway because the finishes lack shine and eye appeal (indicating immersion).

Here’s a closeup so you can see the errors:

Now compare the valuation here to a PCGS sample auctioned off by the prestigious Stack’s Bowers gallery:

You can clearly see the increase in quality on the PCGS coin. Surfaces lack significant markings and details are sharp. The coin has a good shine and an attractive appearance.

Another example of auctioneer hype is the labeling of an inferior coin, forged by an ancillary company, as a “super gem” or in this case, “superb”:


Here is the auctioneer’s description: “Outstanding jewel:”

I grade this SGS coin MS-62 if at all. All relevant fields, especially the cheek, have markings and hairlines. Let’s compare it again with a PCGS example:

In both cases, the auctioneer can determine that the valuation is subjective. I assume they get a pass with that apology. But when they attach an “invisible” PCGS/NGC value or Red Book retail price to it, they are committing a more serious kind of note inflation.

Here is such a case:

The value of this coin is definitely not $2,500. I say it’s silver smelting, about $35-40.

Let’s look at the shortcomings:

It looks submerged. Not only does it have signs of wear on the top right devices; It has a significant rim indicator in the lower left corner making this unclassifiable.

Let’s do a comparison again with a PCGS MS-66+ sample:

The PCGS coin has clean finishes, shine and great looks.

The sad fact is that newcomers to numismatics lack the grading know-how and they believe the hype. When it comes time to sell, as in the 1921 example above, they will overcharge exorbitantly because that’s what they paid, just to tell the truth: you overpaid for a coin of lesser value.

As for the viewers here, that would not apply to you because you are committed to learning about the hobby.

If you like a coin in an online auction and want to compare it to a PCGS/NGC graded example, you should compare the auction coin to those offered by a reputable house such as Stack’s Bowers, GreatCollections or Heritage.

You can also access grading sites such as PCGS Photograde Online.

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