Do Krause world coin values match other guides?

Thank you. Very good advice. I think the picture you depict is accurate and your suggestions are great

 

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Thanks. Interesting. I totally understand what you mean about them being a rough guideline. I'm sure you are familiar with the American Red Book. Would you say the same phenomenon occurs in this guide book? Or would you say the Red Book prices each year are a little/lot closer to market in comparison to world coins?

 

Thank you. Very good insights. I think American numismatists have a parochial view of their country's coins, so I can see what you're saying in the last paragraph. I used to get caught up in the hype but am becoming more aware that the rest of the world collectors aren't as enamored with our coins as we are.

 

I appreciate the reply. I guess my confusion stemmed from both not wanting the Krause to be wrong and not understanding why prices are so off. Your point about using auction prices was made clear and is now well taken. Some others mentioned and I agree that at the very least we can use Krause for basic coin info (besides prices though lol), ordering type sets, etc. It still can be a helpful resource but I am seeing that the prices in Krause leave much to be desired, beyond the common problems all price guides have in maintaining values. I also think my confusion arose and clarification was delayed because I wasn't tying the fact of weaker world coin demand in the US with their Krause prices regularly being reduced when buying and selling. In other words, Krause might be a tad more helpful in another country when buying and selling. I don't think we should throw out price guides totally - The Krause world guide or the Red Book - since some prices don't change, or very little. So I'll have to disagree with the absolutist suggestion. For a low level collector like me, yearly guides and such are convenient and innocuous for the most part. But if I spent more and acquired higher value coins, I'm sure your advice would be more key

 

Demand for world coins in the US is actually usually greater (much greater) than in the home market, in most instances.

The first reason for this is because in most countries, there is no organized collecting and where there is, the collector base is still usually a miniscule fraction of the US. By "organized" collecting, I am referring to the dealer network, auctions, collector clubs, publications and numismatic research.

The second reason is because TPG dominates US collecting and has resulted in US buyers inflating the prices of most of the higher quality/preferred coins in other markets. Most collectors elsewhere do not like TPG or if they are indifferent, still will not outbid US buyers for their own coins. The reason for this outcome is that since US coins are so much more expensive, the best world coins are dirt cheap for collectors here, they don't mind inflating the price level and this is exactly what has happened.

If you look at US auctions and the more prominent dealer US websites, you will see a lot of the higher grade and more expensive world coins sold here but far less or not at all in the home country.

Of the approximately 200 countries issuing coinage, I guesstimate maybe 30 have noticeable collecting locally. Of these, I'd say in less than 10 is financially material.

 

Yes, but also collector markets emerge where there is a lot of disposable income. The US also has a lot of collectors with family ties/history abroad, and from this stems world collector interest.

 

I agree with your second comment. Culture is a significant factor in collector interest.

I don't see that income (or net worth) has much to do with collecting. It is a necessary precondition but has little predictive value in whether anyone will become a collector or not and even less with how much someone will pay or what the collectible will be worth. In countries without a tradition of collecting which is most of them, the correlation between income and propensity to collect is essentially zero. This applies to coins or anything else.

 

A country with currency that is weak compared to the dollar or other stronger currencies for countries where there are many collectors of their coinage will see their coins distributed abroad. Local collectors may be able to buy pieces cheaply that are sold locally, but they may not be able to compete against stronger currencies and collectors with deeper pockets in the global market.

For example, much of the top material left Hungary for Austria and Germany over the last few decades, because that's where most of the deep pocketed collectors of Hungarian coins were, etc.

 

Sorry, while I know the Red Book exists I am not familiar with it. I do collect (some) modern US coins, but the two catalogs (Krause, Schön) get the "job" done for me.

Christian

 

IMO, the editors of Krause have an impossible task if they want to keep everything even somewhat updated on a yearly basis. Their catalogs try to cover "every" coin for every country issued from 1601-present, and that is a lot of coins! If they were to actually verify every listing in every volume, I would think they'd need to charge at least triple what they do for each volume.

The only reason I even want copies is to identify unknown world coins. It's kind of cool to have a set of books that has "every" coin in it.

 

What you are describing may have been because local collectors were priced out or they may just have chosen to not compete financially. We do not know and this still doesn't explain why those who could pay more did not do so.

Since no one knows the financial capacity of the collector base (whether in the US or elsewhere) except anecdotally, what you are describing may apply to some collectors but doesn't apply in the aggregate.

There is no shortage of local residents who can become collectors and outbid foreigners, just as they have already done in South Africa.

Generically, the reason US buyers outbid locals is because these people would rather spend their money otherwise, just as I do. I could afford to spend a lot more if I chose to do so, yet I do not.

 

No, the global marketplace can cause entire countries to be virtually priced out due to currency differences. When I spent time in Hungary in the late 90s, US $15 was enough for 6 people to eat at a fancy restaurant with a violinist playing at the table. A 2 liter bottle of Coke could be had for US $0.09. And yet an imported pair of US jeans was comparatively worth a fortune there at US $45.

Yet the wages there were such that people could afford local prices and live comfortably if they didn't buy much in the way of imported goods. Drive up to Vienna though and a personal pizza (and not a good one - we're literally talking about ketchup on flat bread) was near US $30. When coins were offered for sale, due to the weak Forint and the very strong Schilling, there was no way Hungarian collectors could reasonably compete with Austrians for these coins.

Of course to some extent there were still very wealthy collectors that could afford these coins, but in general, I would not say it was much of a choice. Even if the average collector saved up enough to buy a quality piece, they were still being outpurchased by foreigners whose equivalent buying power would get them 20 times as much.

 

Good point. I totally agree. My catalog (I only have and need the 20th century one - I have a few coins in 1800s or so but use NGC's web site for these) is used quite frequently as well for the reason you mentioned.

 

I am aware of what you are telling me. What you are describing is mostly a function of the financial profile of the current collector.

The difference between US collectors and others is not that the US is generically so much wealthier because per capita income and wealth levels in the US are not much higher or even slightly lower than in countries such as Switzerland, Germany, Japan and Britain. This does not remotely explain why US coins cost so much more or why local collectors elsewhere won't pay more for their coinage while US collectors will. The same principle (though the economic gap is much wider) applies to two other countries, such as Germany versus Hungary since I presume German collectors have an above average affinity at least for Hungarian talers, since these coins are similar to the German counterparts.

The primary difference between US collectors and elsewhere is that the US has an outsized practice (culture) of buying coins for "investment" while hardly any other country does so at all.

Let me give you an example. Income and asset bases in South Africa are much lower than in the US and the Anglo countries (Britain, Canada and Australia) who are presumably where the primary collectors for this coinage are located are competing with South Africans.

Beginning around 2002, TPG became prevalent for Union and ZAR, just as it is in the US with exactly the same effect. The price level is much lower but the price structure is similar (more absurd in some respects) and these coins are among the most expensive in the world, on average in higher grades.

The reason this has happened is because TPG has also resulted in disproportionate "investment" buying for Union and ZAR coins which means that the local collectors (mostly "investors" in my opinion) have to be wealthier than they used to be or else the result would be exactly as you described.

Most of the better coins appear to have returned to South Africa. I say it because when I was most active, the prices in South Africa were noticeably higher than elsewhere. The reason for it is that, as expected, South African collectors have a much higher affinity for their coinage while collectors elsewhere have a very weak one or none at all.

What I was attempting to describe was a general premise, not one which applies in every instance to every country, series or coin.

Another difference between Hungary and most other countries is that the supply of coins that collectors presumably actually want to buy is disproportionately large versus the current and any realistic increase in the prospective collector base. I assume this since Hungary has issued coins for over 1000 years and the supply must be quite large because collecting has been a European tradition for about 500 years and its common for collectors in one continental country to collect from others.

 

I think you're right about the US distinction or emphasis on buying coins for investment. This may be the primary factor for inflated prices. Fortunately (or unfortunately), these prices stay quite high because interest in coins doesn't drastically drop off, like we've seen with sports cards, comic books, beanie babies, etc. While not as popular, stamp collecting seems to go on under the radar because the investment activity and hype isn't there as much as it is with coins or other areas that crash and burn. I am ignorant about this, but my guess is that beanie babies, comic book collecting, and the sports card mania never took off in other countries to the extent it did here

 

Those are very close-up spreads in my opinion. In any case, I was talking about coins in relation to other collectibles - again, such as beanie babies, comic books, stamps maybe. Do you honestly think the ups and downs in the US coin market at any point in recent memory are even close to the precipitous decline seen with these other collectibles?

 

I believe what we are seeing here is the result of a massive demographic change That is well underway in the hobby. It is largely masked by the macroeconomic damage and fallout of 2008. Rare and desirable coins in all categories are largely unaffected by these headwinds at this time.

In another ten years most of the transformation of the hobby will be complete and changes to this time will look nominal. Collectors don't need to fret too much but most investors will be left holding the bag again.

 

I see your point. I guess I haven't been collecting long enough, but my impression is that coins are more solid collectibles and performers in the long run. Since the 1850s or so, when coin collecting really took off, it seems to have retained enough of a collector base to be around still today and to a respectable extent. The other collectibles have no future in my opinion, and I mean no chance of ever recovering a semblance of their former glory. Beanie babies are obvious, but how about sports cards? Those seemed quite popular 20-30 years ago, yet now they fill flea markets booths and don't get sold. Cards made in the 1980s and up (I guess the decades before is arguable, I don't know) might as well be recycled in a dumpster. Comic books experienced their heyday as well in my opinion, at least Bronze Age ones and up. I've heard the talk of gloom about coins and diminishing interest as the collector base gets older. Even if more countries stop minting coins, we got plenty of examples to collect all the way back to ancient times. Furthermore, precious and even base metals have been collected and valued for millennia, so that fares well for the hobby too. Numismatics is the king of all hobbies of course!