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<p>[QUOTE="NorthKorea, post: 2497845, member: 29643"]You missed my point, in that case. I'm saying the supply is thin due to the LACK of a market. You're saying demand is thin due to the lack of a market. If you create a market for the coins, the supply will increase, as dealers will be willing to acquire these from collectors for more than face value.</p><p><br /></p><p>I guess the best way to explain this is a velocity driven equation...</p><p><br /></p><p>In a scenario where supply is thin due to a lack of market:</p><p><br /></p><p>ΔM => ΔS, where M is the size of the market, and S is the velocity of supply growth</p><p><br /></p><p>So, as your market increases, so too will the speed at which the supply grows.</p><p>As your market decreases, the speed at which supply grows will also decrease.</p><p><br /></p><p>If you start offering bids, you start to develop the perception of a market. Initially, the supply will be scarce, until dealers start to believe a market is actually formed, then supply will be released in great quantities. Once a market is established, supply becomes steady enough to maintain demand. If the market is short-term (you're the sole buyer), then the market will collapse once you start buying, and dealers will stop buying. Eventually, they'll start marking down prices, taking losses on their inventory or they'll be forced to close and liquidate anyway.[/QUOTE]</p><p><br /></p>
[QUOTE="NorthKorea, post: 2497845, member: 29643"]You missed my point, in that case. I'm saying the supply is thin due to the LACK of a market. You're saying demand is thin due to the lack of a market. If you create a market for the coins, the supply will increase, as dealers will be willing to acquire these from collectors for more than face value. I guess the best way to explain this is a velocity driven equation... In a scenario where supply is thin due to a lack of market: ΔM => ΔS, where M is the size of the market, and S is the velocity of supply growth So, as your market increases, so too will the speed at which the supply grows. As your market decreases, the speed at which supply grows will also decrease. If you start offering bids, you start to develop the perception of a market. Initially, the supply will be scarce, until dealers start to believe a market is actually formed, then supply will be released in great quantities. Once a market is established, supply becomes steady enough to maintain demand. If the market is short-term (you're the sole buyer), then the market will collapse once you start buying, and dealers will stop buying. Eventually, they'll start marking down prices, taking losses on their inventory or they'll be forced to close and liquidate anyway.[/QUOTE]
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