The days to come

One of the common myths is that when hyper inflation strikes wealthy will be hard hit unless there is outbreak of war or civil disorder that is unlikely. Why it is wealthy that is far more diversified than your average class citizen (art, coins, sculptures etc), equities and they also have $$$ in foreign accounts. Russia post Soviet union collapse and hyper inflation that followed was a great example of this scenario.

 

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and the cpin market will be robust.

 

I don't think so. Who's going to buy all that low-end material? The average guy won't -- he's trying to feed and clothe his family, buy gas, pay the utilities, and put in 60 hours instead of 25; there won't be a dime left over. The rich guys won't -- if they buy anything, it will be high-end material. They won't be buying PM, because there won't be any meaningful quantities around for sale, just a few dribs and drabs. The big auction houses might do very well for a while, until liquidity begins to dry up.

The little guys are going to pile into websites like CraigsList (because it's free and it's primarily local) with giveaway prices, but there's nobody around to buy all those proof sets and albums of Jeffersons and MS-67 Kennedy halves and VG half dimes. For the most part, the coin market is going to stink, because most groups have (various) higher priorities.

Same for the stamp collectors, like me. Especially for the baseball card guys who need a fork lift to move their collection. Old ladies will burn Longaberger baskets to keep warm.

Read about the tribulations of Confederate money in the last six months of the Civil War...

 

I agree with doug444 - I'm no armaggedonist, but as this situation predictably worsens most American collectible "value" will vanish. I suppose junk Silver will then really shine, as M-O-N-E-Y. PMs (bullion) will likewise maintain value better than almost anything else "collectible." As Gold coins are still sold in many banks & bazaars around the world today, intrinsically, it's a safe bet.

Yes, exactly. Particularly if things get really bad, much worse than now. Look instead to UTILITARIAN value?

"Dental Surgery as applied in the Armies of the Late Confederate States" W. Leigh Burton in American Journal of Dental Science, Vol. 1, No. 4 (August, 1867), p.182

"Particularly when it is remembered the price of one gold filling in the depreciated currency of the Confederacy, was more than six months pay of a private! The price demanded for gold foil in 1864 and the beginning of 1865 was sixty-four dollars per oz. in gold coin. This amount in confederate money would be, C$ 3,840., for the prevailing price of gold was sixty for one. Having to pay so enormously for materials—the value being enhanced from the fact of their having to run the blockade—the charges of dentists were proportionally high. The charge for a gold filling was C$120.00, for extracting a tooth C$20.00, and for an upper set of teeth on gold or vulcanite base, from C$1,800.00 to C$4,000.00. Let it not be understood that high prices were confined to dentistry alone. It was no uncommon thing to pay $1800.00 for a coat, $300.00 for shoes, $1000. 00 for cavalry boots, and from $300.00 to $500.00 for an ordinary felt hat. A man considered himself lucky in being able to purchase a turkey for $300.00, which was indeed above the gold standard, but confederate money was plentiful and turkeys were scarce, and the scarcity became greater in proportion to the frequency of the raids of Federal commanders, so that before the close of the war it was with difficulty that fowls could be obtained for love or money."

 

The only true financial investment is recognision, improving and excelling in personal core competencies either in current function and/or via diversification. Thus investing in your capability to generate wealth. There is a difference being poor and not having money and that is what makes people rich.

 

I think this is where so much non-productive disagreements occur: between people who do and who do not think that would happen. My LCS says the grocery store will never take 90% silver...they will take whatever is currently fiat money at that time, and we'd sell 90% to get that fiat, and use it at the grocery store. Of course we can use 90% at our friend's farm or to barter for a buddy to do some welding, but it won't be useful as money EXCEPT after a Lucifer's Hammer event. That said, I refer the readers to your amazing post here, which I haven't been able to process completely, yet: http://www.cointalk.com/t189818-46/#post1565480

 

Wow, Derick! That's a FREE Gold Coin right there. Abit astract as you word it, but "Better Thyself!" is the single best piece of investment advice anyone can offer YES.

 

Increasing your competency would be fine if:

(1) there was somebody to hire you;
(2) there weren't 30 million other under-employed technicians and college grads with the same idea;
(3) the economy was growing; and
(4) hyperinflation didn't threaten to turn all the usual rules upside-down.

The way things are shaping up (a debt that can NEVER be repaid, and the further destruction of the middle class), physical PM in your possession will be the only money you don't have to apologize for...

Here's a little poll that I don't want to know the answer to: How many folks on CT are living paycheck to paycheck? I've already seen a few cases where someone is selling his collection to raise money -- that tells me that he has no savings, and no margin for error.

 

I've had many such disagreements on investment forums, YES it's a polarizing point. My Civil War quote - to doug444's comment - shows (implicitly) Gold coin held better value, yet imperfectly, over the alternatives of "Confederate Dollars" (actually, dozens of currencies) or Greenbacks. And Commodity Pure Gold (refined, dental material) was even more valuable.

Even farther back than my studies of PMs, I came across a tantalizing quote in a book last night - I'll make another post, on "US Gold, Silver & Corn prices."

 

I'm a big fan of British moderns. Initially I only liked the late-'20's issuesafter sterling was removed but as time went by I also learned to like the decimal and even the pre-decimal cu/ ni. I don't believe most of this is very common at all. It's a shame there was nothing in between the 10 P and the 50 P during the ';70's though or that would be my favorite. I don't know if you can find decimals there in pristine condition but they aren't readily available in the US except those that appear in mint sets.

 

I am born South African with some of the highest unemployment in the world. Had a masters in Biotech. Work was scarce. So, I changed and done my degrees again with a master in metallurgy while working full time. Still, work was scarce. Got on a plane with my family and moved to Chile where mining is big. Could not speak Spanish. Learned it, with English not being my first language. Started a technology group out of a container and is now the biggest copper extractive metallurgy research facility in the world. Worked in China and Australia. Finally, changed my nationality to Canadian and is on my way. Walked a hard path, good things do not come easy.

 

Congratulations, that is a GREAT success story. And you were smart to take Canadian citizenship.

 

Another resurrected oldie.......but a goodie.

This fellow, as shore as the dickens, was dead on.

 

Is that true? Is there's a thread on that? And are we conflating very different things here? That premise looks flawed. Doubt there's much of a US coin market in China today, nor tomorrow.

In recent years, the Chinese were buying 'chuk kam' or bullion, NOT K-Gold (alloy) nor foreign coin-gold in alloy. I've heard/read nothing about them buying US-minted 90/10 coin, which is the particular product/market at risk here. And why should Chinese collectors EVER buy US coins (Au or Ag) as such, if America keeps sabre-rattling on currency, strategic companies, Taiwan, etc.? Really - please think that one through. Future enmity won't increase US coins 'collectibility' in China, to be sure.

From a nationalist Chinese perspective, it makes more sense they want their own stuff. (Global Times-The Beijing News 8/1/2012?):
"Coin seller Zhang Guoming said that Chinese collectors are less interested in foreign coins, which attribute to a large part of his shop. He finds that standards for the gold material used to make coins differ. Domestic gold coins are made of 99.9 percent pure gold."

Forbes' Gordon Chang has some good insights on Chinese Gold accumulation. If the rationale behind this article stilll proves true, Iran/China 'commodity swaps' (example) is one way the Dollar's Reserve status is diminished. Bullish for Gold bullion? Of course.
http://www.forbes.com/sites/gordonchang/2012/04/22/the-best-reason-in-the-world-to-buy-gold/

 

One way to clarify China's gold-preferences would be for one of our Chinese speakers to go into Taobao Marketplace and see what gold is being offered, by category.

With the PRC's official approval for citizens to buy gold, I think 10 gram bars (of Chinese manufacture) would be their first choice. Just a guess, however.

My further guess would be that there's close to zero market for American coins, bullion or otherwise, in the PRC, and in any event, proportionally less than the U.S. market for Pandas.

 

I suspect there might be a narrowing of the spread between the high and low end because it's become so enormous. Of particular interest is the spread in MS ranges. At some point, the minute differences in quality cannot continue to expand indefinitely in price. This is particularly true when the quality can deteriorate so drastically, even when properly stored. But this drastic change in value might be barely perceptible in actuality.

It's like the old adage about housing. You used to be able to count on houses to rise in value. Now, not so much. Same with getting the highest quality you can afford. It held true in the past, but maybe not into the future. In many ways, it is a self fulfilling prophecy. Demand tilts toward the accepted practice until it is no longer economically sustainable.

 

Ask Medoraman what he used to pay for Chinese coins back a few years ago, and what he has to pay for them today.

 

A "few years" ago, the average Chinese citizen could not buy gold without jumping through a LOT of hoops; now it's encouraged by the government.

Plus, the "risk-on" status of 1.15 trillion dollars' worth of U.S. Treasuries has changed everybody's thinking.

 

green18-
I agree that is another interesting topic: domestic coin premiums in Mainland China. My point is simply that may not reflect what's happened or will to US Gold Coin, here. Likewise I don't imagine Russians, Indians or Brazilians are racing out to buy US coin (each, for their own reasons) but suspect that PM coins from those countries might offer greater numismatic value for collectors longer term. That's my supposition, anyway. Buy Gold Roubles instead, LOL

fwiw LCS guy (Massachusetts) demands a princely sum for Pandas and Chinese Coin: he insists "they want their stuff back" and charges high premiums accordingly. Maybe he's right, here. Be curious to know the difference between retail premiums in NYC Chinatown and Shanghai, too, but still doubt that says anything about the broader US coin mkt. That's just a mkt segment IMO.

otoh I suppose Chinese & Indian retail buyers ARE significant drivers to bullion prices, and perhaps much more than 'marginal demand'. How much is the $100,000 question, IMO. (I cannot find the financial indsutry white paper that explored this in some detail, in 2010? )
Regards.