Current Market Environment

I found a coppy of paper money and a pric ing guide.. I will get it to you

 

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Small size notes are skyrocketing. I keep seeing notes closing at all time highs. Notes that I was buying for half as much just a year ago. That's a 100% price increase in 1 year. Time to ride this bull market to the top!

This comes from Jeff Brueggeman of ActionCurrency.com, one of the few dealers I trust. I acquired an fr. 105 1880 $10 jackass legal tender from him a few years back. Seeing as how uncirculated large size notes are few and far between, I was curious about its origin.

He responded:

There is a company called Goldline that sells gold bullion on a national level. You may have heard their advertisements on talk radio or something. They got a hoard of notes from around 1890 several years ago. Over the last year they have been disbursing it. There are a few jackass fr's, some fr 70 and 71, and the $20 1891 treasuries that you have seem on the heritage sale.

This has been a great opportunity for collectors as those notes are usually very difficult to get in high grade. And right now the vast majority of the notes have been disbursed. The only ones which have come down in value have been the 70 (I think) as it was previously very rare. And the $20 Treasuries as they were also pretty impossible to get.

 

I really hope currency doesn't go the way of stamps. If it does, at least I'll be able to pick up some grails, while mourning my enormous financial loss.
Guess you just never know.

 

its a matter of time. look at the demographics. Global Population continues to skyrocket while all of the older collectible communities are shrinking. My generation would rather spend their money buying the iphone 1, 2, 3, and 4 right when it comes out, selling it 6 month later for 30% of purchase price. We arent raising investors here, they are CONSUMERS.

 

I have been collecting paper money for over 25 years. When I first started at age 17 the average age of the paper money collector was in their 50s with the average age of the new collector in their early 30s. These demographics have not changed much but the overall number of paper money collectors is greater now than 25 years ago.

Certain segments of the paper money hobby may see a decline but I would not anticipate a significant collapse of the entire hobby as happened with stamp collecting.

 

Good information, because after all I am very new to this hobby. I just dont see what would attract future "digital" generations to a hobby like paper money. Will paper money even be used in 50, 100 years? Digital currency now represents over 97% of money in existence, with a clear trend of increasing share. Even now there are talks of eliminating paper currency and using RFID chips to store currency (major promoters want to limit money laundering and black market activities they say, but its really about control, it always is)

 

Nationals can be good or bad, use Greensheet as a guide also current auction records. Ebay is probably better than HA, because of the wait times and the huge bite HA takes from your profit.

Classic attractive type notes will always do well, but never at high retail prices, unless you are talking about the high end and condition census material that they love to publicize.

 

Depends on the value of your merchandise. For low value items ebay is your friend. If you have rare items that command a lot of money, HA can lower their rates to give everything but the buyers premium. If you have an ultra rarity that commands high 6 figures or more, you might even be able to negotiate part of the buyers premium.

The benefit of HA is that you get exposure to high end collectors and dealers with a lot of capital.

 

As a collector of both stamps and currency, I would agree. And I think it's due to some key differences in the how each is viewed by the public.

Stamps represent a promise of service -- the delivery of mail -- while currency is a form of credit for any transaction. The service offered by the US Postal Service is clearly obsolete in many ways; you don't need a stamp for an email. Consequently, mint stamps haven't even held onto their face value -- there are just too many out there to be used. Dealers are currently buying mint stamps at 50-60 percent of face and selling at 85-90 percent. So people with inherited collections are discovering they can't even get what they thought was the cash value. Why would anyone want to collect something like that?

Currency doesn't have that PR problem. Inflation aside, a dollar bill will always get you a dollar's worth of whatever you're buying. So the trust in the basic value of a note is solid. In the mind of the general public that's the real difference. Stamps are just bits of paper, currency is safe. Beginning collectors need that perceived sense of permanent value. Offer kids $1 in mint stamps from 1957 or a $1 silver certificate from the same year and guess which one most would pick.

 

I never really collected stamps but one of the complaints I had heard about stamps was the way in which the Scott catalog significantly overvalued stamp prices. I can recall seeing ads for stamps that would tout a high catalog for an item but be offered for sale at a fraction of the CV. That sort of uncertainty does not lead to much consumer confidence in the market.

A few years ago the values for German notes in the Pick catalog showed dramatic increases in the lower grades. Those prices bore no semblance to reality. They were the result of a technical problem with the way the values were determined. The higher catalog prices had a negative effect on the market.

 

You're completely right about inflated catalog prices for stamps. I don't know any dealer who doesn't discount at least 50 percent from the listed price in Scott. Establishing an average market price is always awkward, with any collectible. Essentially you're just giving dealers an agreed-upon basis to work from. But Scott is in a particularly difficult spot as the standard bearer in the philatelic market. If they were to list the true selling price for most issues -- say, the average selling price on ebay -- it would be such calamitous drop that collectors and dealers would probably throw up their hands and we'd see an abrupt end to stamp collecting. Even if they adjusted slowly downward to reach a more realistic level, the effect would create a death spiral. Or I should say it would hasten the inevitable. On the bright side, it's a very affordable hobby, and if you view it as historical education, rather than an investment, then there's no reason to give it up.

It would be interesting to know how Krause goes about defining their catalog values. I don't see anything in the U.S. Standard Catalog that explains their formula. But I will say it aligns fairly well with retail dealer prices. That's probably a good test for the health of the paper money market (or any collecting hobby) -- the industry standard catalog(s) should closely match prices on the ground.

 

Interesting points. I have some stamps, but when I saw what dealers offered, it was ludicrous. I have been developing an idea to take advantage of this market. But its hard to even find companies who still do mass mailings. There is a somewhat recent nuance that could allow that 50-60% face value turn into 100% face value.......

 

I'd like to hear about it! Of course you can always use stamps for letters and packages at full value. But unless you want to wrap your envelope in 3¢ stamps it's hard to use the low denominations.

 

I don't know about using those stamps to mail stuff. That's like using old currency to pay for things. Don't let me catch you trying to stuff silver certificates into a vending machine.

 

gsalexan, that very reason is both why the market is selling below face value, and an opportunity. I went to a business school, I know how easy an idea can be taken. Im willing to work with someone on this, but id only give the idea freely to a couple ppl, like funkee is def on that list

If anyone wants to work with me, I need someone who finds buyers of stamps for mass mailings.

 

You can use any denomination of stamp, or combination of denominations, on any piece of mail, and make up any shortfall with a metered strip.