Coin value and Recession

I don't consider my collection an investment per se. I enjoy the coins. I haven't been collecting my whole life. I started when I was 45. I don't have the roots many of you have in the hobby. And while I have some favorite coins. I don't have any I owned for a generation either.

While I enjoy my coins. Selling a few for a profit wouldn't be like parting with family for me either.

 

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All I see around me is people with less and less disposable income. Most of them aren't numismastists though. I think that the availability of marginal money to spend on coins is going to be the key driver of demand-- nothing new there. I don't see a problem with high end coins; they'll keep rising.

But one of the best attributes of coin collecting is that you don't need to spend a lot of money to enjoy it.

 

Recession ?

If you do not think were in a recession , your not looking at indicators that count.
The housing mess will take years to clean up. Not only are we in it, it was sold to foregn banks and institutions. The French use a term called a Tranche , or slice. The first slice goes to the bank who creates the portfolio. It is also the premium debt. The other three Tranches are sold to others looking to make a big return. The slices 2,3,4 are each carry more risk. What happened was that none of this was backed with insurance to pay for default.
We are paying for terrorism at a vast rate per day. War, high oil prices, a very low exchange rate and high metal prices put us in a position we have never been as a country. China sells us 1 billion dollars a day more then they buy. They also hold 328 billion in Treasurys. Oh the stock market is also in trouble. Cash return for 500k is about 3.7%.
Do not ask if were in a recession.

 

Our economy is still better than it was under Jimmy Carter.

 

Hee hee

During the large majority of the time things are going great, the media is silent or putting an abnormally negative spin on things.

Stock market in trouble ? I've made money over the last 5 years, and am optimistic I'll make money over the next five. :thumb:

I've done a lot of traveling in Russia and Mexico. We have an awesome standard of living here. As a nation, we should be grateful instead of whining.

 

Independent

I did not mean to throw a dart at the administration. Some of these things have happened via greed etc.
If you are making a lot of money in the market you are a trader today. An answer to not only what you replied to but what else points us to tough times ahead are needed. Shoe top econimics do not make a market or a potfolio. I live in CA and have for almost 70 years. The signs are showing in home price colapse, and vendors who create and sell items people can live without. We do one thing that no one else in the world can match, grow food and lots to spare. China, India and the middle east all buy from us. If an oil card is played , all know an Army moves on food. This is the third major crash we have seen it twenty years. 1987 , 2000 , and the worst 2007-8 + . You can be out of a job ,house and a place to live in thirty days if you do not have an education and stable work. If you leave a legacy for your children , make it a good education !

 

Just Carl's, spot on,

Over the long run, the value of good coins goes up. If you look at long term chartes of the higher end coins, it's up, flat, up, flat, up, flat. What drops is bullion, and the lower end stuff and of course anything that's gone up as a fad. In this latter category I place things like MS and PF 70 First Strike modern stuff - this will drop should the recession deepen or last for any real kind of time.

If you stick with solid higher end slabbed coins, the market may flatten out for a while, but over the longer term, they'll go UP in value.

peace,

rono

 

or Ronald Reagan, or George Washington. what is your point?

-Steve

 

We may be getting another Jimmy in Nov. A big talker like Carter was.

I just hope not!

 

Don't want to enter a political discussion here, but it's been my observation that those who favor the current administratyion always seem to push optimistic ideas about the economy, while those who don't push a more pessimistic view. You see this especially near an election... those who favor the current president being re-elected (or the presidency passing to the same party) tend to be more optimistic than those who don't. It's not hard to see why the mainstream media is trying to make a lot out of the alleged recession.

Reality is somewhere in the middle most likely... whether in a recession or not, there are always pockets of the economy doing well, doing poorly, or somewhere in the middle. Currently there's a lot of positive economic indicators, and a lot of negative ones. By the time economists come to an agreement of whether or not we're in a recession, it'spropbably going to be over anyway (if there is one). It's incontrovertible that the housing and mortgage market is not doing well, but whether that's a reliable indicator of the economy as a whole is debateable.

Back to the main topic at hand... rare coins are always rare, for example they're not making any more 1916-D mercury dimes. Rarities in the long run, and in the short run for that mattter, will always go up. Any coin containing gold is a safe bet to go up even if only worth melt... gold always goes up in the long run as it's a popular hedge against inflation... if anything economic uncertainty is actually a good thing for gold values, as it increases the demand on gold when people are less certain about the stability of other investments when the economy looks shaky. Common coins not containing precious medal will probably not change all that much... may go down a little if demand drops... but I wouldn't expect any huge fluctuations.

Since I'm a collector of coins, not an investor, if anything I wouldn't mind seeing some coin values go down so I can afford to buy more of them. If you're investor I'd say gold coins, rare coins, or rare gold coins, is pretty safe, otherwise you're just guessing anyway. If the recession, if there actually is one, is driving coin prices down, may be a good oppotunity, but my crystal ball isn't any better than anyone else's.

 

As usual some tend to drift off the topic at hand. Like I said previously. After well over 60 years of coin collecting, it is one hobby where I've never seen prices go down. Level off or go up, never down. I've seen Beanie Babies, Hot Wheels, Sports Cards come and go, but coins have been and still are going up, up, up.

 

this is not a hard rule. never mind the copies from China, look at the supposed rarity of certain Morgan Dollars - after the GSA horde was inventoried, many high grade rarities became a dime a dozen. sure it doesn't happen everyday, but there are hordes out there that might just knock a once rare coin into the realm of common.

but, yes, generally, the odds of a horde of a rare coin are slim and thus the market price should increase over time.

-Steve

 

IF there is a recession or if we're already in one, then the coin market will cool down. Forget about economic charts, the price of oil, etc.

Keep an eye on how many people are checking into CoinTalk. If you have a favorite section of E-Bay, keep track of how many items are being posted in that category. How many people are coming to the coin shows.

When these numbers start dropping, it's time to lower the lifeboats.

 

Don't have to. Like I said I've been collecting for well over 60 years. I go to coin shows about 2 to 4 times a Month and have been for many, many years. I've done dealing with coin dealers at coin stores, flea markets, private dealers for long before there was an internet. I've yet to actually see coin prices go down. Some may say there is a book or pamphlet or something that states at one time they went down, but in REAL LIFE, I've yet to really see that. Of course this is based on only my personal observations for well over 60 years. Maybe where your at things are different, but not in any places I've ever been.

 

It depends on why you buy coins in the first place. Assuming that it's because you want to keep them, then I advise staying in it for the long term. If values drop, eventually, they'll rebound. However, even if they don't, you'll still have your coins.

Presumably these are the same people who see black helicopters lurking behind the hills to take away their guns and their gold. If our monetary system collapsed to the point that paper currency became worthless, I doubt that having a supply of silver coin would make much of a difference. It might last for a while, but then what?

 

No doubt about that.

Whenever I see a wild curve like that, I ask two questions :

1. What caused the irrational skyrocket in '86-'88 ?
2. What caused the crash in '89 ?

Why the radical upswing in the first place ? Was there a unique, one-time event that swung the market ?

I believe so.

The advent of certified coins in '86 (PCGS, then NGC) caused investors who had no interest in coins to pour money in. Pure speculation.

Back then, those TPGs were new, and most coins had not yet been certified. Plenty of good ones were raw.

So that investor money was competing for the certified portion of the market - not all coins as a whole. Big demand, small supply.

Artificially small supply, because it's only a portion of all coinage available - the certified portion.

The skyrocket was radical, overpriced, and unstable. An unsustainable bubble. It burst.

And as soon as it started to drop, the well-known "herd mentality" of the market kicked in.

Crash.

Go back to the graph. Take a look at the index value in 1984 and 1994 . Draw a line between them, and you see a moderate increase - similar to the moderate increase since then.

A nice, stable, sustainable increase.

IMHO, that's what the market would have done if not for a one-time, unique occurence - the inrush of investor money following the advent of PCGS and NGC.

 

Perhaps another factor in the increase was the strong US economy in the mid 80s.

 

Another factor shown by the graph - does it appear we are currently at a lofty peak ? Not really. It seems to show that today's prices are the result of more moderate, long term growth. Sustainable growth.

Yes, there has been a bull market for a while. But it's not as insane as the mid 80s thing shown on the graph.