World Colonial

On 11/23/2022 at 7:41 PM, GoldFinger1969 said:

But that was a legit shock in terms of price and sentiment.  Prices SKYROCKETED in 10 years...it was one giant bubble....subject to legal restrictions, you could buy Saints for about $70 which then cost 5x as much 5 years or so later and 20x as high in 10 years.  You had lots of people with sticker shock who couldn't see paying 5-10x what they had laying flat for years or decades in price.

Even small denomination penny/nickel/quarter/half dollar/other coin types had great appreciation, even aside from silver and gold coin types.

That's not going to repeat but the increases in many coins have been "noticeable" in the last two years, per the examples I gave earlier.

On 11/23/2022 at 7:36 PM, GoldFinger1969 said:

I think SLOWLY or GRADUALLY rising prices -- since most of us have done lots of buying ALREADY -- is not necessarily a bad thing.  You don't want the coin hobby to resemble 1989-90 or the NFT craze...but you don't want investor enthusiasm to go the way of stamp collectors, either.  A happy medium is best, I guess.

 

Yes, I agree this is best.

Concurrently, I still consider the prices of many mostly US coins far too high, for the collectible merits where these should be more affordable to "mainstream collectors".

On 11/23/2022 at 7:09 PM, GoldFinger1969 said:

I don't know how you can define "getting priced out" like we are talking about San Francisco real estate and you're a middle-class worker making $100,000 a year who doesn't work for a tech company making 4x that amount.

Did coins get "priced out" in 1989-90 during the bubble when Wall Street dollars were coming in -- with more to come -- and MS-65 Saints sold for $3,500 and gold was at $400 ?  If a bunch of social media gazillionaires or crypto gurus (at least up to 6 months ago) had decided to put a few hundred million into coins/Saints, that would jack up the prices, no ?

Does our EC, Bob Simpson, and others drive up the prices on trophy coins ?  Does that drag upward the prices on 5 and 6-figure coins even if you don't buy 7-figure Saints ?  If the 5-figures go up, can that impact the 4-figure coins we swim in over time ?

When a commodity has limited supply, and demand increases, the only "fair" way to allocate is for the price to rise.

Apples and oranges from my example in my opinion.

It's my inference that the majority of collectors don't expect to ever buy the types of coins in your post.  They could never afford to buy these coins and some who are able won't buy it anyway,  so it makes no difference to their collecting psychology if the price goes "through the roof".

This is different than being priced out of what I'd describe as "collector" coins.  This first happened at scale in the mid-70's.  You've seen the PCGS 3000 Index.

The point I was trying to make is that collectors who are accustomed to one level of collecting won't move endlessly down the food chain to collect something they find noticeably less appealing.  This varies by collector but believe it applies to most.  It's my inference that many collectors from the 60's quit collecting in the 70's for the reason I am giving you here,

On 11/23/2022 at 6:01 PM, zadok said:

...demand is inverse to price? i guess thats one way to look at any market, however, coin collecting n especially auction records dont tend to support that premise..."if its too hot in the kitchen, then get out of the kitchen"...seems like a more accurate reflection of the present coin market....

I was attempting to draw an analogy but apparently not successfully.  I know that higher demand = higher price.  I'm not disputing that.

The buyer since the mid to late 70's and especially post TPG is a lot more affluent versus earlier buyers, so I assume more of them are willing to treat higher value purchases as a consumption expense.  This is an inference, not fact.

As an example, I infer that what I'd describe as common or very common coins with higher numbers on the TPG label are viewed as far more desirable primarily due to the price.  It's the most logical reason, since pre-70's collectors obviously didn't think of these coins the same way.

If these coins return to more closely reflect earlier relative prices, I expect collectors will change their perception, again.  Not all of these coins are bought explicitly as "investments" but the buyer would usually never pay this type of price without expecting to get most of their money back. 

Registry sets make a difference but no reason to believe it's important enough to more than a very low minority.  To most buyers, finishing first (or whatever) in a marketing competition doesn't offset losing much or most of your money.

On 11/23/2022 at 3:32 PM, gmarguli said:

I'm not sure that collectors getting priced out of their series is a bad thing. It sounds healthy for the market. It means that there is more demand (more collectors) as part of the hobby. Those priced out of a series will likely look at a different series or world coins. 

It depends upon someone's view of collecting.

Overwhelmingly, the sentiments I read both on coin forums and in the numismatic press is a preference for higher prices.  It's not even close and it's worse among the dealer community who pretends to be promoting the hobby when both common sense and their public sentiments better demonstrate it's irrelevant to them.  I can understand a desire by collectors to recover their cost (no one wants to lose money) but that's not what I infer.

I realize there is no "optimal" price level to satisfy everyone or even most.  Conversely, I don't see how further financializing collecting above what already exists can be considered a positive for the hobby, only for the business side.

If you are familiar with financial behavior, the evidence shows that prices in an "investment" market increase, it's more desirable.  Rising prices are "good" while falling prices are "bad".  This is the same sentiment I infer in financially motivated buyers toward coin collecting.

For goods and services, it's what the economic textbooks state.  Demand is inverse to price.  That's how I view collecting.  The more expensive a coin is, the less I want to buy it.  It's less desirable to me, not more.

That's why I don't collect most of the coins I initially did upon resuming collecting in 1998.  Everything is more expensive, but the prices don't reflect the merits as a collectible, in my subjective opinion.  This was the initial reason I didn't bother collecting any US coinage, as it's totally uncompetitive with world and ancients.

If I were to collect other coins in addition to those I do now, I'd be spending noticeable multiples of what the coins previously cost, usually hundreds and maybe thousands for something which should sell for nominal prices, except to those who believe that every "desirable" coin should sell for "noticeable" or "high" prices.  Cumulatively, this would be at least in the five figures for coins I don't really want.

There is also a limit to how far "downward" a collector is willing to go which everyone who I have ever read expressing your sentiments ignores.  The collector who is priced out of what they used to buy is supposed to find what they can still afford interesting, even though the one making this claim would never collect it as their primary interest.

On 11/23/2022 at 2:01 AM, GoldFinger1969 said:

Makes sense.  One estimate for collectors of Saints was that 500-1,000 were serious registry players....about 25,000 were Type collectors or partial-registry collectors (anywhere from 2-20 Saints; I'm in this group).....and the rest in the hundreds of thousands who were investors in bullion who used a few super-common Saints.

The registry number seems too high, unless by this you mean set collectors.  Maybe there are this many.  If you remember my analysis from a few months ago, it is the #1 series for highest budget collectors, per the Heritage archives.

On 11/23/2022 at 2:01 AM, GoldFinger1969 said:

There are about 10 Saints that have 20,000 or more coins in Mint State alone that are available at spot gold or modest premiums for low-60's Mint State grades.  These are the coins that the 3rd group, the investor class, would be utilizing for the most part.

This is my assumption also.

On 11/23/2022 at 2:01 AM, GoldFinger1969 said:

I have not seen any estimates for serious Morgan registry players, Type collectors, or investors using them as a silver bullion substitue.  I am going to guess it is a multiple of Saint investors given the much lower cost to collect....probably as many as 10-20x as more.

I'd guess there are in the vicinity of 100,000 who collect the series in some format.  Either the entire series (which is large and expensive to most collectors) or some sub-group, like one per date or all dates from one of the mints.

There must also be a large number of impulse buyers, who aren't collecting by type.  This is the probably the majority, for the common dates.

Still, the most common dates like the 81-S must have in the vicinity of 1MM going by the current TPG counts.  Even with my guesstimate of 2MM active collectors, it's unlikely in the vicinity of 50% own any single Morgan dollar date, very unlikely.

On 11/22/2022 at 5:22 PM, GoldFinger1969 said:

How is it going to help their investment ?  If their "investment" is modern coins costing $50 - $1,000....I might agree with that because many newcomers into our hobby have used their time at home and discretionary income (and govt checks) to splurge on coin and currency novelties.  But most of the PCGS/CU crowd isn't into moderns and the kind of lower-priced stuff that newcomers gravitate to.  You have some SERIOUS collectors there.

I do NOT see it benefitting higher-priced coins/currency as this has not been the area where the majority of these people have gravitated to.  Maybe with Crypto, NFTs, and sportscards imploding, they'll move on to serious coin collecting but that remains to be seen (as you and I have discussed many times here ).

I am not spending any $$$ on re-grading, either, WC. 

I'm making a few assumptions

First, that the intent is to eventually convert a noticeable proportion of these new collectors into other coinage.  If it succeeds at scale, that's how it could happen.  Otherwise. I don't see that there is enough money in the effort, as I presume most volume will occur under bulk submissions.

Remember also that "at scale" doesn't have to be very large if it increases demand in a particular area "noticeably".  For my primary collecting interest (which is unlikely from this source), one new collector outbidding me is "noticeable".

Second, it also depends upon the source for most of the volume.  My assumption is predominantly NCLT.  1982 is a rather odd cut-off, unless it's intentional to coincide with US modern commemoratives and (presumably) for world coinage series such as the Panda and Mexican Libertad.

It's my inference that most collectors of NCLT who transition to other coinage buy equivalent "classics" including Morgan dollars, generic pre-1933 US gold, and world coin equivalents.

Looking at the TPG population data, the bulk of the volume for circulating coinage is proofs, not business strikes.  I presume substantial buying of Ike dollars occurred from marketing promotions but someone else will know about that.  These buyers are probably more likely to transition to US classics normally collected by the broader collector base.

On 11/17/2022 at 8:38 PM, Crawtomatic said:

The grading scale can be a knowledge barrier for the casual collector when it's not in line with other collectibles.  I guess this addresses that.

Anyone with an IQ of 100 or higher should have no problem comprehending any grading system (US or otherwise) I have encountered.

Or maybe this is part of the problem?

On 11/17/2022 at 2:03 PM, Fenntucky Mike said:

Bringing new people in is not a bad thing but I doubt many will cross over into more traditional collecting, 3% sounds about right. 

This could turn out to be a good business decision for BX, short term money maker then flip CCG. 

Depends upon someone's definition of "good".

I don't want any increase in financially motivated buying. This is a likely outcome of this practice, more financialization of the "hobby".

I don't buy coins to intentionally lose money but never became a collector to diversity my portfolio.

Since COVID started in 2020, I've read from numerous sources about the rising price level.  I'd consider modestly rising prices ok but not some of the price spikes we've had since then.

1921 Peace dollars, common Morgan dollars, 1916-D G-4 Mercury dimes, and MS-63 09-S VBD cents have all increased significantly and that's just a short list.

On 11/17/2022 at 6:09 AM, EagleRJO said:

I'm going to go against the grain here and say it may be a good change in the long run.  There has been talk of switching to a more logical 100 point system for a while, which it essentially will be with tenths. 

Been gone from here for a while and catching up.  Someone may have said this later, but I'll find out soon enough.

It's a revenue generator or intended to be one.  That's it.  A private equity firm bought them, and this is one option to generate incremental ROI to make it pay.  None of this has anything to do with collecting.  It's a business and I get it.  Said so on the PCGS forum where the majority seem to think it's a good idea.

The real dream of the TPGs is to change to another grading scale and convince enough coin owners (notice I didn't say collectors) to resubmit to maintain marketability at current levels.  It's somewhat similar to the complaints I've read about CAC though I consider the two different.

For "collecting", it's another option of attracting a new group of predominantly financially motivated buyers to inflate the price level as much as possible.  This is my inference why a plurality on the PCGS forum thinks it's a fantastic idea.  They believe it will maximize return on their "investment".

Will this work, either as a parallel system or replacement?

I'm not spending a dime to get my coins regraded now or later, that's for sure.  Fortunately, I don't collect any US coins, so it will matter a lot less. 

It's this type of practice that affirms my decision not to collect US coinage, as if I needed one.

1. Sesquicentennial half

2. Lafayette dollar

3. Isabela quarter

4. Stone Mountain half

On 9/22/2022 at 12:57 PM, VKurtB said:

You must be a laugh riot at parties. Perennial pessimists need to drink themselves into stupors. Too much Chicken Little for my tastes, man. “The sky is falling … eventually.” Here’s the dealio. Eventually is after the end of my life expectancy. There’s only one true bogeyman out there, and his name’s Putin and his irresponsible rhetoric. 

Claiming most people are going to be poorer (my actual claim) doesn't remotely correlate to what you think I said.

On 9/19/2022 at 11:18 PM, GoldFinger1969 said:

Why would you think that price manipulation would work if at all beyond the short-run ?  It NEVER does.  See, Soros vs. Bank of England, 1992.  

I don't believe this and if you understood what I have written before, you should know it.  I used the example of the CHF to contradict your claim of any country having any supposed "defense" to prevent negative outcomes.  There is no such defense, as the only "tools" any country has are the same ones any others have and had in the past. The effectiveness of these "tools" is ultimately contingent upon collective market participant psychology, as your example illustrated.

On 9/19/2022 at 11:18 PM, GoldFinger1969 said:

I think, WC, you continue to have a single-minded focus on debt and assume that more debt in the aggegate is bad without looking at the underlining debt fundamentals and more importantly THE DYNAMICS of multiple countries with large debt levels.  It doesn't mean they ALL collapse, if any.

I'm also aware that there is no specific debt level to trigger a crisis of any sort.  I know it because I concurrently know that these events aren't caused by any supposed "fundamentals" but market participant psychology.  You are the one who holds the almost universal erroneous conventional belief of "fundamental" causality, not me.

I haven't also said that any "collapse" is imminent either.  I know the fundamentals are a lot worse than you will ever admit but don't expect this now or in the immediate future.

Of course, it also depends upon what anyone means by "collapse".  In your example of the GBP, it didn't take a collapse in the relative FX value to drive this currency out of the predecessor currency arrangement.

That's what applies with this subject of the Euro and monetary union.  The monetary union can break apart in whole or in part without a "collapse".  Given the political environment, I can anticipate it will be resisted vigorously which will ultimately trigger very negative "blowback" (another psychological outcome) but this is another thing entirely.

On 9/19/2022 at 11:18 PM, GoldFinger1969 said:

As an example, the United States -- as the global reserve currency -- is required to run a trade deficit in goods and services (the flip side of a capital account surplus in financial assets)....trade deficits for many countries are lethal but for the U.S. it not only is NOT lethal it is an economic necessity for the U.S. in the global economy.  

I haven't said a thing about this subject in any prior post.  But as with anything else, there is a limit to how long the US will be able to consume above its means at the rest of the world's expense.  A segment of the population in the rest of the world will ultimately be poorer in the future for agreeing to this arrangement, since these currency units will obviously never be redeemed at anything close to the value in the original exchange.  

On 9/19/2022 at 1:23 AM, GoldFinger1969 said:

That's the key.  Greece's goose was cooked when they went Socialist in 1981.  Took 30 years to implode...a small, tourist-driven, 3rd-rate economy and financial center.

Top 10 countries with global central banks and other levers have much much stronger defenses against financial contagion.

Given the actual fundamentals which are much worse than you will ever admit, it can happen a lot faster than you think with a change in sentiment.

Yes, the countries to which you refer have wealthier economies to mismanage but ultimately since all financial values are psychological and not the result of any fundamentals, a change in sentiment is more than sufficient to "blow up" the Eurozone.  

Look at the Swiss National Bank.  In 2011, they pegged the CHF to the Euro at 1.20.  Considering they were attempting to suppress the value of their national currency where they control the supply, if any price manipulation should have worked "forever", this should have been it.

They capitulated anyway.  I don't need to explain why they gave up the peg, the fact is they abandoned it.

This subject is no different, despite that I know that none of the EU crats want it to happen.  There is nothing like adversity to create discord and division, no matter how much unity appears on the surface.  We're talking about human beings, not robots.

On 9/19/2022 at 1:21 AM, GoldFinger1969 said:

Not likely but we'll see.

If you want to track the BEST global financial columnist and a guy with his pulse on the EU and Euro like nobody else I have read, get a subscription to the UK Telegraph and read Ambrose Evans-Pritchard's columns.  He's brilliant talking about the EU, the Fed, Green energy, OPEC and oil, politics, etc.

Only reason I subscribe to the UKT although their coverage of the Queen was also outstanding and good reading. 

I know who he is, an establishment apologist.  I've read his commentary and like him, but he's pro-EU in everything of his I have ever read.

When I said rates will "blow out" later, I wasn't just referring to Italian debt or the weaker member states.  I'm referring to (practically) everywhere and this includes the US too.  No one wants to hear this because it's contrary to their personal preference.

When rates blow out in countries like Germany, what's the ECB going to do then?

It's one thing for these gimmicks to work when rates are low in the Eurozone "core" and the problem is contained to the "periphery".  It's another entirely when rates "blow out" everywhere.

There aren't any "wizards behind the curtain" at the ECB any more than there are at the FRB.

On 9/18/2022 at 10:57 AM, GoldFinger1969 said:

But has the BULK -- the low hanging fruit -- been plucked ?  I think so.  Certainly relative to 1980 (PM bubble spike) and 1990 (coin bubble spike) and then you have 30 years since 1990 of folks needing cash, dying, inheriting, liquidating, etc.

Compare PCGS Coin Facts estimates to the TPG data.  Maybe most of the most expensive (and highest quality) coins you follow are now graded but I don't follow it that closely.

On 9/17/2022 at 7:25 PM, zadok said:

...u would be shocked at the number of collections n hoards i see in a year including pre '33 gold n pre 1900 proof issues...i appraise these collections for the county probate court prior to disposition, i probably see 15-20 major groupings of coins in any given year including maybe 200 or more of ur "classic" saints, usually in unc-gem bu, seldom any r circ n virtually none r certified....

This makes sense in that it supports the variance between the TPG data and PCGS Coin Facts.  I consider Coin Facts usually too low (for the coins I have looked at) but it's often noticeably higher than the TPG data.

There is also a common perception about the TPG data being overstated due to duplicates.  Yes, I know it is, but this doesn't concurrently mean most of the better quality coinage has been submitted.  As usual, it just depends.

This week, I was looking on Heritage.  Early US federal silver and Capped Bust this time.  Much of the better coins is their virtual bourse where they often have multiples of the highest graded coins, sometimes five MS of the same date for draped bust dimes or half dimes (can't remember which one).  

If only 15 1802 half dimes are in a TPG holder now while the estimate is more than twice this number with this being a five figure coin at minimum, we can be almost certain there is a lot of most everything else out there.

On 9/17/2022 at 7:31 PM, zadok said:

...in what time frame?....

It depends if the asset mania is over as I believe.  (The one which most don't think exists.)

If the credit cycle from 1981 ended in 2020 which I believe it did, interest rates are destined to "blow out" later this decade.  If the ECB persists, then Euro will be at risk of crashing.

Eurozone fundamentals are bad, worse than the US.  I expect this new policy to be abandoned before the decade is over.

On 9/17/2022 at 11:59 AM, zadok said:

...wont the EU go to bat for italy like the bailout that greece received or was that the imf that supported them?....

The ECB recently agreed to a modified form of QE where it will no longer expand its balance sheet but instead only buy the debts of weaker member states to keep spreads from "blowing out".

That's the plan anyway.

The reality?

It won't work for very long, as it creates the perverse incentive for states like Italy to expand their budgets infinitely.

This is another form of "can kicking".  My prediction continues to be that many (and maybe most) of the 19 member states will leave the common currency with the remainder creating a United States of Europe.

On 9/17/2022 at 10:11 AM, Quintus Arrius said:

The reason why 1936 sticks in my mind is because in Red Books from the 1960's that's the first year listed under Proof Sets, if I am not mistaken. 

Even before TPG starting in 1986 after which more sets were broken up, there weren't many pre-1936 full sets available.  The 1936 set is hardly cheap, but it's a lot cheaper than any set dated earlier even without the gold coinage.  I presume this is the reason for the Red Book format.

Yonaka's reference doesn't have much on counterfeit detection.  It's a topic I recommended to him for future updates on all three books of his I own.

On the attached image, it's consistent with XF+.  I think it's a nice coin, but I don't know the current prices which might have moved up noticeably since 2020.  Sometime shortly before or at the beginning of the pandemic, an eBay seller had a 1763 Mexico 8R NGC AU-58 for $895.  A very nice coin for a very good price, but I didn't buy it because I had a lot of expenses at the time and I almost never use funds from savings to buy coins, only out of current income. This was cheap for the time but now a comparable one is $1500+.  It was the ideal type coin and I should have bought it.

On 9/16/2022 at 3:02 PM, zadok said:

...there r sources here where u can buy at par, no fees no exchange penalties etc...ive bought currency for maybe 20 countries when the rates r good,even though i mite never go there but my kids mite go, the canadian money hasnt made me any money but at least dont have to deal with buying it if already have it...most recently, one my kids traveled to UK i had bought few thousand pounds when it hits its low n prob saved over $1000 on that trip....

I have about 1000 CAD in currency notes that I brought back with me from my trips visiting my brother.

If buying in volume, I'd want to buy local government debt.  I haven't looked hard but haven't seen it as an option from a US financial institution.  I've owned the single currency ETFs in the past but those contain futures contracts and don't pay interest.  Now that CAD interest rates are finally noticeable, if I owned a meaningful amount, I'd buy CAD treasuries. 

Back in 2002, I asked my broker (Schwab) about it, but they told me the minimum amount was $10MM.  I don't have that much spare change lying around.

I'm only interested in holding in a Treasury Direct account equivalent and I have never read anywhere that any other country offers it.  I thought I read it for Canada once but haven't seen it since.

On 9/16/2022 at 3:16 PM, zadok said:

...ur experiences in purchasing rarer foreign from the more obscure countries, especially colonial n territorial, mirror mine...most of my purchases r from auctions usually in the higher end signature type auctions n surprisingly from ebay, at one time i shunned ebay listings as amateur sources but then i realized that some of the major dealers utilize ebay to broaden their scope to find the equally rare collectors who want to buy their rare coins...its just as difficult for them to find us as it is for us to find their coins....

Most of my auction purchases have been from US or Spanish sources.  Same for eBay and all my dealer direct.  Heritage is my largest single source with 14 but only four coins I rank as among the most difficult to buy.

I have a want list I would like to buy, compiled mostly from catalogs (Sellshopp and Patterson), Gilboy's plate coins, and the TPG pops.  A few sold prior to 2010 before I started looking diligently but mostly, I'm assuming that the same collector owns it even after up to 34 years or it sold privately.