Current Market Environment

Id like to solicit some opinions on the current state of the currency market. I recently sold some notes at the FUN auction, and watched at least half of the total bills offered, I noticed most sold below Heritage estimates, with maybe 5-10% going above estimate. I also saw many many ultra rare notes up for sale. Im wondering, is market collapsing?

 

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Not entirely. I think that there is a surge in lower value, small size notes. I've seen prices for silver certificates and emergency issues rise by 50% over the last year.

However, I also noticed that high grade large sized notes have decreased by about 15% during this same time frame. There's still some variation, and I still see some notes selling at 2012 prices.

With ultra-rarities, I think the market is soaring with record prices with every major auction. Fr. 379b sold for $3,290,000.00 yesterday.

http://currency.ha.com/c/item.zx?saleNo=3526&lotNo=17127

A previously unknown 1882 $500 gold certificate Fr. 1215d, Rosecrans Hyatt large red seal, sold for $1,410,000.00.

http://currency.ha.com/c/item.zx?saleNo=3526&lotNo=17165

Overall, the market has some intrinsic variation based on demand. I don't think we're anywhere in the vicinity of a collapse.

 

I've seen uncirculated world banknotes and circulated military currency end up at the end of the counter, near the store entrance/exit, in one giant binder and all at $1 a piece or less. No expensive banknotes were displayed anywhere in the store. Precious counter and glass display space left for coins, only. If you want to see valuable notes, you must ask to see something specific. I have a feeling paper is just paper (with very few exceptions) and banknotes share a common future with stamps. On a positive note, this area of collecting waste paper and recycling has gained a few popular additions over the years. I hear that CrownCaps, Bread Labels and Banana Labels are emerging as hot and inexpensive hobbies around the world. Coins seem to be where it's at, as far as hobby stability is concerned.

 

your correct, my use of collapse was too liberal, but your observation on large size notes seems quite accurate, I saw quite a few bargains hammer at 1/3 of high estimate.

 

I was hoping to net 25g, only up to 19 so far. But its money I didnt have yesterday.

 

I have the same thought in terms of comparison to stamp market. Once the baby boomers pass, I expect I'll be able to use the knowledge Ive gained to buy my pieces back at a fraction of the current prices.

 

Not a bad thought. But short term investments haven't worked out for me in the past.

That might be why prices are dropping now. But don't forget that children will inherit collections and sell them, flooding the market and driving the price down further. This could go on for an indeterminate period of time.

I think a lot of young people are just getting into currency collecting with the media reporting on the new $100s. Since most people start out with small size notes, this might explain the large price increases I've seen in that area.

 

I personally have never met anyone in my normal walk of life below the age of 40 who collects currency. When I go to shows, I stand out like a sore thumb as a 27 year old. There are some dealers who have involved their children, which will add some longevity to their collections. But I cant see how demand will ever be higher than right now, considering baby boomers retiring, loads of excess cash and time.

 

I am 26. I've probably turned on at least a couple of people under 30 to currency just through gifts. I've even thought about spending silver certificates to get them into circulation and maybe turn more people into collectors, driving future prices up further. But I'll never know if it works.

 

Ahh heres my most recent notes that were graded. 10 more scheduled to be graded at pmg currently.

 

continued

 

Best way to get people involved is history imho funkee, with such large print runs for things like the $1 silver certificate, i think we need 100 years to flush out collectors for those to appreciate

 

I have seen hundreds of thousands of coins in jars and bins selling for no more than a dollar a piece. It is apparent from this that the coin market will collapse.

 

I have to disagree! I'm finding fewer and fewer pennies and nickels in the convenience store parking lots.

Chris

 

Just as the State Quarters gave a boost to the coin hobby, could major changes to US currency result in increased collecting? By this I mean changes more significant than the new $100 bill, such as:
1. Phasing out the $1 bill (very likely)
2. Adoption of polymer notes (somewhat likely)
3. Phasing out paper currency entirely (possible in the more distant future)

 

To this I would reply:
1. Probably never
2. I've got no clue
3. NEVER ON GOD'S GREEN EARTH (or in the next decade or so anyway)!!!!

 

I agree that these things may not be right around the corner, but even if they happen much later they may bring the next generation into the hobby. If something major happens a few decades from now then hopefully my children and grandchildren will be interested in my collection...

For all of our sakes I hope that paper currency doesn't get phased out anytime soon due to the potential for government control and abuse.

 

Most notes out there are not worth much, especially world currencies. I don't like the direction of monopoly money colour or polymer with new notes. If condition is what separates the collector value from the face value of a note, polymer is the beginning of the end for this hobby. Rarity and deterioration will only remain with the old notes. Polymer notes are hard to fold and hard to crease. Personally, I already don't want to invest more into a hobby, where analyzing serial numbers and using them in inventive ways to make up fake value, is all that seems to matter. I just like looking at the details and designs of old notes. New notes seem soulless. I'm lucky to only have one thin binder to worry about. I don't expect there to be any value in them, and many of them probably do not qualify for a worthwhile condition grade.

 

The market for some notes is obviously up - friggin' Republic of Texas notes are way up recently which sucks since I have only three of them. Seems like most currency is up now, which is bad since I am still acquiring. These days it's mostly the occasional star note, and still quite a few obsoletes. But educationals are up in the lower grades, nationals seem to be as well.

I hate it. It can go up once I am done collecting, not before...

 

I agree with MEC on this one. As far as large size notes, I think entry level collectibles in low grade are going up in price: Chiefs, Bisons, Educationals, 1917 $2's - up to Fine 15. In mid-to-higher grades 30+, prices seem to be going down.

Less common notes like 1886/1891/1908 Silvers, 1890/1891 Treasury Notes and 1875/1878/1880 Legal Tenders, are going down in price (especially in higher grade). I think the market is catching up to the flood of these notes following the Goldline discovery and the sale of a large number of uncirculated notes. These are pretty advanced notes to collect. Most people who wanted some were able to acquire them in the last couple of years at under-market, and are pretty content.