So I was at a local show and they had old Coin World's at the table out front. I grabbed one, not realizing it was from 2016. Eh, I read it anyway tonight. They had a great article from the great David Bowers about grade inflation. In the article, he observes how even circulated coins are now massively grade inflated by the TPGers today, with VF IHCs with missing letters in Liberty being commonplace. He muses that this massive grade inflation is singularly responsible for the bear market US coins has experienced the last 20 years. I have thought about that since @GDJMSP has brought it up over the years. Selfishly, for the TPGers this is good since it requires the same coin to be submitted over and over again to be regarded under ever more lenient standards. For the hobby, though, this has to be horrible to show values ever decreasing. What is your opinion?
There is something to it. Some will tell you there has been no gradeflation and coins are graded the same as they have been for many years. I don't see that as being completely true. Yes you can find old holders where the grades look similar to some coins in new holders, but a big part of that is due to the nicer/accurate coins being cracked and upgraded while the below average examples remain in their holders. Color bumps also exist where a coin will get an extra point or two for nice toning (some will call it more holistic grading). In terms of prices, gradeflation isn't the whole story. It is one of the causes of prices falling, but there are others: less collectors, more supply (populations of graded coins keep increasing), metal prices (when gold/silver/precious metals move, they can take other segments of the coin market with them), etc.
IMO a lot of coins are over graded by the top grading companies. Sometimes I'll look at a coin graded by PCGS, compare it to their Photograde app, and the coin is graded higher than what their own photos show. (For example, they'll grade a coin XF 40 but if you check it against the app it will look more like a VF 30 or 35). Probably NGC, ANACS, ICG do the same but they don't have a photograde app so there's nothing to compare it to. (Except another coin).
Look at the bright side: twenty years from now people will not have to pull the latest grading guide with a pallet jack thanks to digital technology.
There might be one or two people around here who don't know mine, but thanks to you they do now - without me saying a thing
There are 5 articles in 2016 in which Bowers used the word gradeflation. 2/15 Examining Inflation of Grading 2/22 Current Certified Grading 9/12 Grading Through the Ages 9/19 Grading is a Matter of Opinion 10/10 Coin Certification is Beneficial to Hobby
Mr. Bowers has been writing articles about TPG grading, and saying the same things that I've been saying, for as long as I have been saying them - almost 15 years now.
From the selling side (and somewhat from the buyer side, too) this hobby is first and foremost a business. So none of this surprises me whatsoever. I would be more surprised if things like this were not going on. Of course no direct and irrefutable evidence exists, but everyone pretty much knows anyway by just paying enough attention. It does run a risk of crashing values someday, though, as does any artificial inflation of anything. In that sense it's in no one's interest in the long run. But we seem to have forgotten about the long run as a world anyway.
Someday ??? "Someday" arrived in 2008. edit - hmmm, for some reason the link isn't working correctly, try this - https://www.pcgs.com/PCGSMedia/graphs/index10graph.gif
