By definition a Non-Circulating Legal Tender coin is a coin that has been issued by a recognized monetary issuing authority, but is not intended for circulation as a medium of exchange.  Widely recognized examples of NCLTs include United States Mint and Proof sets, American Silver, Gold and Platinum Eagles and Commemorative coins issued by the US Mint. Although anyone can break up a US Proof set and spend the coins at the local grocery store, not many people are apt to do that.

Generally speaking, NCLTs are coins struck specifically for collectors and are not intended to be circulated, hence the designation as Non-Circulating Legal Tender. What many folks don?t realize, is that mints are in the business of ?making money making money?.  The United States Mint is actually one of the very few government bodies that actually turns a profit every year.  The difference between the actual cost of producing a coin ands its face value is known as ?seignorage?.  In the business world we call it ?net profit?.

Although NCLTs have been around for a couple of centuries, in the past twenty years there has been an explosion of NCLT production as more collectors have been made aware of their existence and simultaneously, many third world countries have seen the viability of NCLTs as an important source of revenue.  Another factor accounting for the growth of NCLT collectors has been the rapid increase in price of many of the circulating issues.  With the current value of an uncirculated 1893-S Morgan Dollar at $85,000, is it any wonder that individuals are looking at alternative issues to fill their collecting needs? Finally, with many NCLT issues being limited to fewer than 5,000 pieces issued, the value of some to the earlier issues continues to rise as more new collectors are looking for these pieces to fill out their collections.  As recently as five years ago the Palau Marine Life Protection Series One Dollar coins could be purchased for $12 to $15.  Today they are hard to find at less that $35 and some of the earlier issues sell for as much as $75. 

As a visual reinforcement of my position, I have included a side-by-side image of two Krause catalogs.  The smaller of the two is Krause?s ?Collecting World Coins? which catalogs ninety-nine percent of all of the CIRCULATING issues since 1901 and is a 767 page volume. The book it rests on is Krause?s ?Standard Catalog of World Coins?, 33rd Edition-2,335 pages and includes all circulating issues since 1901, PLUS all of the NCLTs!

According to figures released by the US Mint, 1,430,000,000 people are collecting the new States Quarters. If we can say that of those people ninety-nine percent will never become serious collectors, that leaves an influx of 1,430,000 new collectors coming into the hobby.  A lot of those folks will gravitate towards NCLTs, and rightfully so.  This is the time to get involved and be ahead of the wave that I see coming.