High prices of US coins due to greed?

This is just an idea of mine.

Coins from other countries are not worth near as much as some US coins. You can get some very old, low mintage, high grade coins from other countries for a fraction of the price of some us coins.

But, what if the prices of US collector coins are just inflated tremendously over the years?

Let's say each year all coin dealers raise their prices, but they just keep doing it, year by year, artificially inflating the prices of US coins.

Prices usually work based upon supply and demand.

I think the demand for old coins now are about the same. But I don't know this for fact.

However today with the internet, the supply of coins are higher than ever, hundreds of thousands of them on the internet, all waiting for a few clicks to make it into your home.

So, if it's not the dealers, then what really controls or sets the prices of coins? Who says "Ok next year the 1916-D mercury dime will be worth $30 more"?

 

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it's what people will pay based on trying to sell them. put a price on something and see if it sells. if yes ask a little more next time. if not lower it 'till somebody buys.

 

To add more suspicion..

Once upon a time there was a coin I was looking for. It was not a key date, or a semi-key.

The greysheet and redbook had it listed in the grade I wanted for $80.

However after looking at all the dealers, ebay, etc.. I could not touch the coin for less than $140.

So what good is the price guide, if you cannot purchase it for said price?

BTW, there were plenty of them on the internet, but dealers were asking almost twice it's book value, inflation?

 

Demand sets prices on some US coins. And yes they are easier to get now more than ever - better to keep prices down. So unless you get more specific it is hard to say - and yes you would need to track prices over 20 or 30 years. Doug remembers the 80's and can provide more specific details than I ever could. I don't think it is greed on a grand scale.

 

With all due respect, detecto, I must disagree with the original premise.

The demand is much higher for US coins than for many other countries. It's not about greed; it's about how many people have both interest and disposable income.

But there's a bigger issue here...

It's become very trendy - and conformist - to accuse others of greed. I say we end that. Many of the people accusing others aren't so perfect themselves, and are living very prosperous lives.

To those in Third World countries, almost all Westerners are wealthy... and might appear a bit greedy as well.

Let's stop accusing others of greed. If we want the world to be a better place, let's just take a more honest look at The Man in the Mirror. Let's just individually improve ourselves and look for the next opportunity to help someone else out.

 

Price guides are written months or more in advance. The key word is "guide". That does not mean "gospel". Supply and demand dictates price not a consortium of greedy dealers.

 

This is a very complex question; there is no simple answer.

For one thing, price guides are often out of date and out of touch. Sometimes, they're too high, occasionally too low.

A classic case is greysheet prices for half cents. I have NO IDEA where they dreamed up those numbers, but they are ridiculously low. As a full-time dealer, I guarantee you I can't buy half cents wholesale anywhere NEAR those numbers. Often I'm paying double or more. Exceptional coins will sell for even more - maybe triple.

So imagine how I feel when I add 10% - a very nominal markup - and someone complains I'm asking MS63 money for an AU58 coin...

 

Well for one, a price guide is simply that, a guide. There is no assumed promise that anyone can buy or sell a coin at that price. Second, I will let you in on a little secret; every day the exact same coin in the same grade is sold for 2 different prices. Some is expected, since each coin is unique. However, there is also the fact some dealers simply charge more, and get more, for their coins. Each dealer has a different clientele.

The simple, honest truth about US coin prices is that there are more modern coin collectors in the US than anywhere else. Also, US collectors ONLY collect their own country in a much higher percentage than anywhere else, making US coins the most highly collected coins on the planet. This, coupled with an "investment" mentality towards US coins, leads to high prices for common items. I find "key" dates especially grossly overpriced in the US. In the scheme of things, a 1916d mercury dime is not rare at all, for a world coin it may be labeled scarce at best. However, its first the demand by US collectors to fill a date/mm set, then the extreme promotion by dealers in the hobby, and then by "investors" who only buy "key" dates, that has led to its price. Its a self fulfilling prophecy, because as soon as any coin is labelled a "key" its price goes up BECAUSE its "key".

I jumped off the merry go round. Just Saturday I received a coin that maybe there are 50 of in the world, and its just dripping with interesting history. My price I would have paid was up to $80, but I won it for $32. I sure as heck would take 29 more coins like this before I would take one Good 1916d dime that they made 264,000 of.

 

There's a lot of truth to this.

IMO, the dominant factor is "demand by US collectors to fill a date/mm set". Just think about how many of those blue Whitman folders were sold to 13 year old paper boys back in the day... millions of 'em. That folder increased demand greatly. It affected the mind-set of kids, and now those same kids are grown-up and "gotta collect 'em all".

For that reason, a 1909-S VDB cent is expensive, but certainly not rare.

I'm not so sure on this one. I think almost all keys are, in fact, significantly scarcer.

For example, people search rolls to complete their Lincoln set and never find certain dates, so they have to pay extra for those dates. Those "certain dates" are truly scarcer; the large number of people competing for them drives up the price in true free-market "supply and demand" fashion.

The 1914-D Lincoln cent truly is scarcer and a true key; calling a 1958-D a "key" would not artificially drive up it's price. There simply isn't enough lipstick for that pig.

That said, I am aware that certain issues temporarily go up in price due to promotions or novelty; however, that bubble almost always bursts and the prices come back in line with reasonable prices.

 

Doggone it, I like those two guys posting above me........

 

Supply & demand regulates the prices for coins.

Supply & demand regulates the prices for coins..

Supply & demand regulates the prices for coins.

You just answered your own question.

You're right, you don't know that for a fact.

The supply doesn't change but the availability does.

Supply & demand regulates the prices for coins.

 

Dealers can ask whatever they want for a coin. It is up to the buyer to agree. Therefore it is buyers, not sellers, that set price.

 

You are absolutely correct sir that a 14d is rare "compared versus other lincoln cents". Compared versus most other measurements, (half dimes, half cents, SL dollars, etc) though, and its downright common. They are only "rare" within that series. However, once its labeled a key, many collectors only buy the keys so therefor its demand is then artificially driven up, not from collectors wishing to fill a set but by "key date" investors. Back in the 80's there was a grouchy old guy that had about 2 rolls of 1877 cents, and would show anyone who asked them. He bragged about how many sets couldn't be completed because of him. Some people only want to collect "the best", and if they own one mercury it will be a 16d, if one IHC it will be a 77, etc. That was the extra demand from "investors" I was referring to. The simple fact is US coins from the 20th century that we call "rare" are not rare at ALL compared to most of the rest of the world.

Chris

 

Funny - met one at the local shop who would "said" he bought every 1955 doubled die they got in. Said he had 10 to 15. Rarer and scarcer can be interpreted a lot of different ways when it comes to US coins - from mintage to strike, to grades. In the end it is all about the demand for the coin.

 

I agree.

That's one reason why I avoid the word "rare" in describing 20th century US; perhaps even the word "scarce" is too generous.

The key is supply AND demand; as pointed out earlier by several, demand can be very high even for coins with "high" mintages. A classic case - the 1909-S VDB 1c, with mintage of 484,000. I suppose the surviving population is many tens of thousands. That makes it an r.1 "rarity factor" - in the "most common" category. Every auction has stacks of 'em... and yet, it's quite pricey.

In contrast, I recently sold the rarest coin we've ever owned - a pattern with a population of FOUR. That makes it rarer than a 1913 "V" nickel, and 3 times rarer than an 1804 dollar - either of which sell for 1,000 times more money.

Why would the more "common" coin sell for 1000x more ? Because there is so much more interest.

 

There's another important factor, often overlooked. It's not how many were minted, but how many which survived that counts.

But there's an even bigger trump card...

It's not just how many exist, but how many are on the market right now today that counts.

Ask anyone looking for honest, original, eye-appealing Early US Type coins (pre-Seated Liberty). I assure you the supply has dried up. There's tons of "stuff", but true quality is more elusive right now than three years ago. This is especially true with copper. It's really tough to find nice stuff right now, and it is EXPENSIVE.

 

Very very true sir. I alwasy tell people what you want to buy is what the dealers do not have, that is problem free, original, truly scarce collectible coins.

Dang I hate it when I cannot disagree with someone.

 

Remember back in the early sixties when the 1903-O Morgan was considered to be the rarest of all Morgans? They were fetching prices of upwards of $1000. Then someone found a few bags of these coins in the Philly mint vault and over night what was once rare became common......and affordable to own. The price literally plummeted.

 

I don't remember it, (I was negative 6 or so at the time), but have read about it a lot. I remember some dealer actually sent a bag of them with an employee, along with a Redbook, to Europe hoping to score some big profits before they heard about it.

My big worry holding many "key" dates, (I do own a few), would be what happens as the coins get older and fewer and fewer people collect the entire series. I mean, what value is a 16d dime, 14d cent, or 1916 SL quarter if everyone turns to type collecting? That is what would keep me up at night as the holder of many 4 figure coins that are only "key" IF hundreds of thousands of people continue to collect by date and MM that series. I think type "keys" would be safer, but maybe that is just me. I always liked getting a different design for my money more that "well this one has a d instead of an s for that date....."

 

Will everyone please stop collecting Mercury dimes, Lincolns Cents, and Indian Head cents so that the scarce issues will not be in demand? Then I might be able to afford them in decent condition!
All kidding aside, prices for even non-key issues have jumped way up- perfect example are mint state 1909 VDBs. Pretty darn common in the scheme of things, but in the last three years, the price has gone up quite a bit. Probably due to the 100th anniversary and all the hubalu around the recent reverse changes.