World Colonial

On 3/29/2022 at 7:23 PM, VKurtB said:

I have no sympathy for those with the bucks to play in the big leagues but not the time. I support the 1950’s -1970’s system overwhelmingly with about 0.04% exceptions. 

Missed this thread earlier.

To @GoldFinger1969's point, it's another outcome of financialization.  Counterfeiting existed then like it does now, but it's a bigger risk in the last few decades due to the (much) higher price level.  Gold coinage has more problems with "doctoring" than other metals, but it's not a problem for most collectors because they don't buy gold coinage since they can't afford it.  Other problem coins (cleaning) somewhat similar financial risk to buying fakes.

On 7/18/2022 at 11:00 AM, GoldFinger1969 said:

Is that the young kid I read about last year ?

No, long-time poster (off and on) on the PCGS forum.

For $25.25 plus shipping, I would hope so and it's about time.

On 7/16/2022 at 7:28 PM, GoldFinger1969 said:

Nope...and I can't name any Penny, Nickel, Dime, Quarter, or other collections, too. 

Either a collectio is all-encompassing or it focuses on Saints or 1804 and earlier dollars or something like that....or the collector remains anonymous.

Only generalists with high value collections are well known even within collecting.  Forum members or those who otherwise actively engage might know for specific series.

I can name "famous" collections from Latin or South Africa coinage.  Over 99% of the collector base has never heard of these people, with a not much lower percentage probably not knowing most of the coins even exist.

$73 is a lot for $19 of silver because that's what the US Mint is actually selling.  The relevant question seems to be, how much can the US Mint raise prices to cover increasing costs without pricing out most of the customer base?

This is the underlying economic problem in the coin industry business model.  As long as the collector base is growing with increasing flow of funds, increasing costs aren't a problem, in the aggregate.

As soon as prices stagnate or decline for any period of time, the business model breaks down, in whole or in part. 

It's reflected in US Mint pricing.  It shows up in higher TPG and auction fees.  eBay essentially ruined their selling platform for most coins years ago, though I think that was more driven by efforts to increase profits and beat EPS estimates.  I don't buy or sell at B&M dealers, but this is also part of the reason more of them are closing.

The reason it's a problem is two-fold.

First, most collectors aren't going to spend increasing amounts or proportions of their coin budget on incidental hobby expenses.  Coin budgets are predominantly to buy coins, not to cover the industry's costs or provide it with profits.  It's a discretionary purchase, always.

Second, many collectors either can't or won't increase their coin budgets to compensate for it, certainly not with 40-YR high inflation and tightening credit conditions.

In response to the OP's question, I presume it's a cost saving move due to the requirement to price everything using full cost accounting.

It's already $73 for what is now $19 in silver.  I understand the limit is 746,000 which if it sells out, almost certainly means it's going to be another money loser later, absent a big run up in silver spot.

On 7/15/2022 at 2:48 PM, zadok said:

.american collectors r more absorbed in famous, best, most, highest everything , this carrys over into numismatics its similar to US coin collectors fascinations with varieties...many if not most foreign collectors care little for pedigree, famous, varieties... their interests r more akin to type sets n many could care less for date sets....

I infer two reasons for what you described, related to actual collecting:

For the collector of European and some Asian, there is 1000+ years to collect versus somewhat over 200 for US Mint.  The coins are also much cheaper generally, so it's more feasible to buy a larger variety and not being obsessed with TPG differentials, find the older coinage a lot more interesting.

Second, a noticeable proportion of coinage outside the US is actually hard to buy, as opposed to the US which mostly isn't, even in high quality.  Western Europe and Anglo countries from the same time period are frequently approximately equal or even more common but not others.

So, since it's often very difficult or not possible to complete a series by date at all even in typical collector grades, there is no point in even attempting more recent US collecting practices: "finest known", varieties, errors, color/toning, matched sets, whatever.  That's predominantly done with (very) common US series which can literally be completed in "high quality" in as little as one day, which includes every one starting with Barbers except for the Indian Head Eagle and Saints.

On 7/15/2022 at 3:27 PM, GoldFinger1969 said:

I think it took DECADES to disperse, Zad !

Even the Eliasberg sale took I think about 15 years to liquidate.  I realize it might take a few years, but 15 ?  And it's not like they sold off all the top stuff and it took a while to sell the "dregs" of the collection that nobody wanted.  I believe both sales included top Morgans, Saints, Liberty's, etc.

To my knowledge, the bulk of the Eliasberg Collection was sold in 1982 by Bowers & Merena which included rarities like the 1822 half eagle.  Last sale I know was by Stacks of his world gold in 2005, 3600 lots.  I don't know if any sold prior to 1982 or after 2005.

On 7/15/2022 at 9:42 AM, Quintus Arrius said:

I accept your explanation, but my lying eyes tell me. differently. The well-heeled Chinese have to park there money somewhere and it seems collectibles are right up their alley.  I can distinctly recall a time when collectibles were imited to Ming vases, screens and tapestries. Now, seemingly overnight, one Kilo pandas, gold coins and "ancients" are soup du jour.

"

You need to think of the subject in the proper context.

Financially, you're talking about a rounding error.  The "market capitalization" of US coins as "investments" dwarfs all others combined, yet it's financially immaterial in the context of global financial flows.

Since I know there is a massive credit mania in China (debt has exploded since the GFC), the world's biggest real estate bubble, and their stock market is still about 50% below the 2007 peak, I can conclude most Chinese put their money in real estate, fixed income or private businesses locally or its offshore but certainly almost never in Chinese coins.

Can't speak to Chinese ancients but that Chinese modern NCLT you reference has been expensive since inception.  It's "made rare" with an intentional artificially low mintage. 

It's not much of a real coin either, as it would make a great coaster (being the right size) for someone's glass of wine.

On 7/15/2022 at 9:45 AM, GoldFinger1969 said:

Famous to us.  You ask the average American to name a famous coin collection, they have no idea.  They are more likely to know and name a famous telescope ! 

When I think of famous collections, these come to mind within 30 seconds:  Eliasberg.... Norweb.....Bass....the 1930's and 1940's oldtimers who dealt with the great dealers Mehl, Kosoff, Kreisberg, etc.......Hansen (but I don't know exactly what he has besides some top Saints).....Half Dome (not sure who started this one but the name sticks with me because of the California hiking mountain)....Simpson......and now I think of our friend, Elite Collection (only 1933 DE, #3 at worst 1907 UHR).

Yes, I know the names in your list above, except for Kreisberg who I have no clue about. This still doesn't mean that most US collectors (much less from anywhere else) have ever heard of most of these people.  I don't think they have.

It also depends upon someone's definition of "collector".  Using a narrow definition inferred on coin forums where the collector base is rather small, I suppose some of these people are "famous" but like you said, predominantly among "old timers".  

It's simply not relevant to most US collectors, so they almost certainly don't care to know.

In any event, this doesn't extend to collectors of a single series (Morgans or otherwise), as all of those on your list are or were US generalists.  Having the "finest known" or top registry set of some series isn't "fame".

What I am writing is independent of buying coins previously in a "name" collection, but that's not what the OP asked.

On 7/14/2022 at 11:09 PM, Quintus Arrius said:

... coins minted in Asia are slowly becoming a substantial portion of their auction sales platform on World Coins.

It depends upon what you mean by "substantial".  21,000+ auction lots out of 368,000+ in the archives is a still a low proportion, though I presume it has increased in recent years.

To the extent the TPG data actually reflect local collecting in China, it's substantially or mostly NCLT.

Also, though I infer the supply of more recent Chinese coins (excluding NCLT) is higher than in the rest of the developing world (due to the higher mintages from population), I doubt it's sufficient in higher quality to support "mass market" collecting where it's concurrently financially "meaningful".  Exception will be PRC except that these coins are very common and lack the necessary preference to sell for "high" prices.

There aren't any. 

I wouldn't call any coin collection famous at all.  Eliasberg is the closest one and predominantly to US collectors, not elsewhere.

On 7/13/2022 at 4:02 PM, GoldFinger1969 said:

Meanwhile, inflation continues to soar but the dollar is the best house in a lousy neighborhood and this is impacting gold negatively as the Dollar and Euro hit parity.

USD is the cleaning dirty shirt in the room.  As I attempted to explain in an earlier post, gold already rose noticeably until last August and it isn't an inflation hedge like most who buy it for this purpose believe.

On 7/13/2022 at 4:36 PM, VKurtB said:

My point is credit is irrelevant. 

Well, I guess we will always disagree.

On 7/13/2022 at 2:37 PM, VKurtB said:

That’s the problem then, isn’t it? The fact is that in macroeconomics, you actually CAN get something for nothing, and you can KEEP getting something for nothing quite literally for GENERATIONS. 

What's your actual claim?  That it's temporary but just long term?  Or permanent?

If temporary, I attribute it to a very long cycle, one I might add which our generation benefited mightily from at the expense of the next one or two.   The credit cycle I referenced started in 1981.  The prior one was from 1946-1981.

What the consensus calls or implies as "permanent", I call financial leverage on steroids + unprecedented mostly government created moral hazard = a future "fail tail" catastrophic systemic failure.

When will it happen?  Well, almost certainly no later than when the US loses its leading geopolitical role which no one in their right mind can claim will last forever.  Given that US foreign policy has completely gone off the rails in the 21st century along with fiscal and monetary policy, I anticipate it's going to be nasty.

On 7/13/2022 at 12:32 PM, VKurtB said:

Whenever I hear ANYBODY whine on incessantly about “easy credit”, I expect to next hear about praexology, and malinvestment and all the loony Austrian School garbage. Sorry, WC, not buying’ it. It’s all snakeoil from Mises. 

I haven't read Mises, so don't know how much I agree with him or not.

It's that I don't believe in something for nothing, not just because of economics or finance, but physics.  That's what modern economics effectively believes (including reflected in government policy).  I call this political math where 1+1 supposedly = 3 and its nonsense.  

Debasing the currency (monetary policy), borrowing from the future (fiscal policy) and government loan guarantees (a form of Congressional "pork") doesn't magically make the US (or any country) wealthier and doesn't create permanent increased prosperity either. There is no economic order (like the Jesuits) within the Materialist Secular Priesthood with the power to manage collective outcomes this way.

It's my belief the credit cycle, the primary enabler of the unprecedented credit mania which still exists now, ended in 2020.  If it did or when it finally does, the artificial prosperity that went with will be mostly or entirely reversed.

The actual macro fundamentals in place now in the US, the West collectively, and much of the world generally are far from positive.  It isn't evident yet because we're still near a market peak.  What most people call the negative fundamentals will become obviously evident later or toward the bottom.  That's what always happens.

On 7/13/2022 at 6:22 AM, J P Mashoke said:

Where I live the average bad fixer upper in a old area on a 1/4 acre is $400,000 the houses near the water are always 2 mil or more. Most are only bought for the land. The house is torn down and a new 6 mil house is built. That is just the way it is around here.

There are regional differences but the "wealth effect" and credit conditions still trump everything else. (Some increased real wealth from outside the US too depending upon the location but loose credit conditions and a fake "wealth effect" aren't limited to the US either.)

I see from your avatar you live in Cape Cod.  To my knowledge, it's been expensive for a long time and so has MA as a state vs. the rest of the US.  But by a "long time", predominantly resembling anything like it is now at most since the beginning or during the financialization era, starting in the 70's or later.  Most of the expensive areas in the US of today and the recent past were "reasonably" priced up to the 90's, not "stupidly" expensive like now or recently.  I'm not referring to Park Avenue in Manhattan or Beverly Hills (which were expensive long before this fake economy we have now) but where "ordinary" middle class or moderately affluent people used to live.

Never been to Cape Cod but think of it as a nice place.  Being non-urban, it's one I consider a candidate to remain desirable (and more expensive) despite my bearishness generally.  I expect most larger urban centers to visibly show the effects of the actual social decay which has already occurred but just isn't evident, yet.  This includes metro ATL where I live now.

On 7/12/2022 at 4:17 PM, GoldFinger1969 said:

No, actually I think I agree with the bulk of your sentiments.  I just do not think that coins are going to get slammed by a 4% Fed Funds rate.....they might not be HELPED and even go down....but not like these phony baloney Crypto currencies and other assets that went up TONS more than coins.

Let me clarify one thing.  My claims in this thread are a longer-term view, unless the financial markets totally crash very soon and don't recover.  I don't think the (US) coin price level is at risk of imminent "collapse".

I do think it is at substantial risk of having all post-COVID gains reversed and more, though it's going to vary noticeably by coin.

On 7/12/2022 at 4:17 PM, GoldFinger1969 said:

I guess the good thing for coin collectors is.....we may go down but we'll lose alot less than other inflated assets that are junk. 

I don't think falling prices are "bad".  I am a collector, not buying for financial reasons.  I am interested in paying less, not more. 

If I cared that much about losing money on my coins, I wouldn't buy what I do, spend much less, or not be a collector at all. It's all also why I don't buy what most others do, because like them, I would mind losing money on those coins.

This is another aspect of my viewpoint which differs noticeably or radically from most collectors who have anywhere near what I have "invested".  I don't consider myself a "pessimist", as I am mostly indifferent to the financial outcome.

That's why I can write impartially with this "negativity" while almost no one else will because this outcome is contrary to their personal preference.

On 7/12/2022 at 12:16 PM, GoldFinger1969 said:

Then maybe we have to accept "financialization" of coins and collecting.  As transparency and information has increased in the present relative to 40 years ago (TPGs, internet, online auctions, etc.), perhaps the price for these coins SHOULD increase from both higher demand and a reduced "risk premium."

I can tell you in the stock market, comparisions to the P/E for the stock market during the 1920's, 1950's, or even 1980's is ludicrous (and I'm more of a value/GARP guy).  As transparency and information have increased exponentially over the decades, the normalized P/E of the stock market has gone up.  Where stocks used to trade anywhere from 6-15 times earnings....today it is closer to 15-25 times earnings.

Food for thought.

It's all part of the asset mania and the loosest financial conditions in history. 

I can't explain any potential preference for higher premium numismatic coins over bullion coins.  This doesn't mean I can't explain that collecting has been financialized and the increased price level isn't caused by a collective epiphany.  The fact that collecting elsewhere (outside the US) today overwhelmingly resembles US collecting half a century ago is proof of it.

It also isn't a coincidence that what I am describing correlates to the loosest credit conditions ever and the most inflated asset markets in history.  I also know that this isn't "normal", but the result of an extremely long credit cycle predominantly caused by inflated psychology.

It's what I have posted here before, though I know you substantially disagree with me on this subject.

On 7/12/2022 at 9:22 AM, GoldFinger1969 said:

WC, you make some excellent points.  I just think that with other coins collapsing in price at various times -- commemoratives, Franklin Halfs, etc. -- if these coins were substantially overpriced the price would come down.  I don't think a coin could stay at 6x fair value for years and years unless it DESERVED to.

It's the financialization of "collecting", pure and simple.  There is some financialization (and marketing due to TPG) with the two series you mentioned but not nearly as much.  Those are also the two US series which I believe have been displaced most by (world) NCLT, where the "collecting" is also substantially driven by financialization and where it isn't, still by financially motivated buying by those who are most interested in getting their money back.

On 7/12/2022 at 9:22 AM, GoldFinger1969 said:

I agree with you on the number of collectors.  It's tough to deciper "strong" from "weak" hands.  But again, with so much supply...what do you think is holding up the price if in fact it is overvalued ? 

Primarily the loosest credit conditions in the history of civilization.  What I am telling you now (and in the past) is not something you are likely to ever hear from anyone else, both because they aren't even aware of it and second, because the alternate outcome is contrary to their personal preference.

Think of it another way.  It's likely (very likely) that there are more "high quality" 1881-S Morgans (or other common Morgan and Peace dollar dates) than all world silver crowns, combined.  If this isn't true, it certainly is excluding Canada and China which probably have the largest supply outside the US.

You see that?

One date has more supply than all non-US comparable coins put together and probably by a huge margin, as in multiples.  That's how common these coins are now.

But to get from current value to where I consider fair value will require extended economic conditions where it's bad enough to make people sell stuff they normally wouldn't, not just coins but other things too.  

Unlike you, I think that will happen but not before silver spot moves a lot higher.  So, I expect the market price to fall a lot less or stagnate even as the inflation adjusted price collapses.

On 7/12/2022 at 9:22 AM, GoldFinger1969 said:

If it is investor demand holding the coin -- and not coin collectors -- it is STILL someone who wants the coin.  Not sure why since you would think they'd prefer low-premium bullion coins.

I'll admit I can't explain it.  All I know is that there seems to be no possibility that there are anywhere near enough actual collectors who want it as a collectible.  Many collectors may also own these dates in large numbers but still for financial reasons.  Some collectors own multiples but no one owns dozens, hundreds, or thousands for their "collection". 

It's either that or the actual collector base is much larger than practically everyone believes.

On 7/11/2022 at 11:46 PM, GoldFinger1969 said:

But demand is pretty high for coins like that....from collectors and folks who can afford a quasi-bullion coin.  Who knows how many people own it such that if silver goes to $50 or $100 an ounce....this coin doubles or triples, even if it lags bullion in appreciation percentage.

Future silver spot is the only justification I can come up with for why the price won't eventually crash.

On 7/11/2022 at 11:46 PM, GoldFinger1969 said:

Also...lots of people can afford a $200 coin.  It's a lot different than what I see for Saints with plenty of supply and folks have to fork over $2,500 or $3,000.

A lot of people can afford it, but the evidence better illustrates that only a rather low proportion do so.

In the past, a dealer posting ATS estimated 80% don't spend more than $300 on a single coin.  This is also the cut-off for the large coin show "budget" sections, so I think it's "ballpark" accurate.

Maybe 100,000 collectors and "investor" types collect Morgans as a series.  Add type collectors, random buyers, and those who collect short versions (like one from each mint or all dates from one mint) and maybe it's up to 250,000.  I don't think it's much more.

On 7/11/2022 at 11:51 PM, GoldFinger1969 said:

I'd be curious to see the price going back decades relative to silver.  That said, I still think expecting it to sell for $25 is way too low.  $50 would be cheap....$100 might be "fair value" or something like that.

In the pre-financialization era, this coin was worth FV or a few dollars; in the 60's.

In late 1975 when my family first returned to the US, I had an 1880 VF Morgan dollar with a Red Book list of $7.  "UNC" was probably in the range of $15 but it's a noticeably "scarcer" date.  Silver was $5.25 in February 1976.  But by then or very shortly after, coins were already being widely bought as "investments".  You can confirm this by comparing the 1977 or 1978 Red Book and earlier editions in the decade when prices exploded, even for common "collector" coins like the Capped Bust half in "UNC" where the most common dates listed for $450 in 1977 (or 1978) versus $75 in 1970 (or near it).

On 7/11/2022 at 11:51 PM, GoldFinger1969 said:

Again...the coin is AFFORDABLE which means alot.  The average person can afford 1....and if you want 2 or 3 or 4 you can even stretch for that and it will be 1/3rd what a Saint would cost you in average grade.

I understand your point, but you are completely missing mine.

The only reasons this coin sells for current price is due to #1, "investment" buying.  #2, because of it, the vast majority of this date (and any others like it) are "off market" owned by non-collectors or in dealer inventory.  And #3, because buyers expect to recover most or all of their money.  I make this obvious statement because there is no basis to believe there are anywhere near 1MM (TPG count is 550,000 now) who want it as a collectible.  I have estimated 2MM collectors in the past which many think is (far) too high, but regardless of the actual number, a large majority never paid for and don't own coins anywhere near $180 for the reasons we've discussed elsewhere.

To my recollection, it sold for slightly over $100 pre-COVID which corresponds to your "fair value".

I'm also aware that there is no possibility for it to be valued at $25 now while (most) everything else sells for (near) current prices.  That's what you are implying.  It was an example to illustrate how inflated the price level is generally.  The price is totally disproportionate to the scarcity and collectible merits.  It's a practically common as dirt "widget".

It's no different for at least practically all post -1933 US.  For classics, the supply likely vastly outstrips current or likely future demand across practically all of the grade distribution, though I know all prices are set at the margin.

Go look at Coin Facts estimates.  I consider it wrong in many instances (probably most of the time) but can see it being "directionally" accurate here.  The TPG data don't reflect it for reasons discussed here before, mostly by me.

On 7/11/2022 at 5:49 PM, GoldFinger1969 said:

WC, great points. 

I don't collect recent or post-WW II U.S. coinage or pre-WW II small-coinage....but my understanding from reading ATS was that prices for stuff like Franklins, GW Quarters, etc.....got slammed after 2012.  Huge declines that you didn't see in the bullion or quasi-bullion pre-1933 gold or silver stuff.

Given the source, probably in the highest grades and near it.

Give it enough time and I expect most post 1933 US coinage to sell for less than the grading fee or nominal premiums to silver spot, even in grades of MS-66.  Outside of specialization (die varieties, errors, recognized strikes), none of this stuff is even close to scarce except based upon the TPG label.

Similar principle for common "investment" widgets like the 1881-S Morgan dollar.  Heritage sold an MS-65 on June 29th for $180.  Combined pop in this grade is about 115,000 (yes, for this one grade) with I'd guess almost no duplicates (proportionately).

That's nuts.  It's a bullion coin selling for about 10X spot.  It's a classic example of how collecting has been financialized.  With somewhere in the vicinity of 1MM estimated to still exist and maybe around 75% owned by non-collectors, its price is almost certainly predominantly due to financially motivated buying, since the supply exceeds the demand by those who actually want it as a collectible by a substantial margin.  It's so common and the difference between one point MS increments is so minor, as a collectible, $25 is a generous price with current silver spot at $19.

 For really common coinage like these, it doesn't take that much demand change and unlike scarcer coins with a much higher preference, it's not like the owners will hold it off market in large numbers. I've read similar sentiments to yours and I'd attribute the price movement in the two series you named mostly to displacement by (world) NCLT.

Even without any economic headwinds, reduced set collecting alone is enough to create the outcome in my post.  It's not like there aren't many better options to buy.  A collector can buy one very nice example at a moderate price (if they want it at all) and do without the rest.

On 7/11/2022 at 1:31 PM, GoldFinger1969 said:

WC, I don't see a bubble in today's coin prices.  Maybe longer-term demographic headwinds impact the prices for those most inflated but even these came down sharply from 2012-20.  Remember the recent rise in the PCGS 3000 index is in the context of a huge drop from 1989.  Sort of like the Japanese stock market. 

No, not because of a bubble.  I agree there is no bubble in the traditional sense, but there is a hugely inflated price level anyway due to credit expansion and the asset mania.  It also depends upon the time horizon but here are the factors I have provided before:

One: Competition from alternative recreational opportunities.  This is coin or series specific.  It applies to US collector coins under 60's collecting practices most.  It doesn't apply to gold or metal substitutes (hardly) at all, like modern NCLT, common generic pre-1933 US gold, or the most common Morgan dollars.  It's an on-going consideration but mostly a long(er) term issue for the price level, as in multiple decades.

Two: The end of the asset mania and much tighter credit conditions.  I'm not trying to get into the details again but much lower prices in the major asset classes will undoubtedly hit the upper end, hard.  Much tighter credit conditions will hammer coin prices across the board.  The two go together.  There won't be an end of the asset mania without much tighter credit and unlikely vice versa.  The tighter credit conditions I am describing aren't just the result of FRB monetary policy either (now or later), but much broader.  This could be "soon", or not.

This is what I am referring to when I said prices could crash and it doesn't matter if coins aren't in a bubble either.  The prices of so many US coins in particular are so detached from any "reasonable" assessment of the collectible merits primarily due to marketing and financialization. 

Three: Negative demographics due to a change in the population composition, ethnicity and not aging.  This is longer term and should affect US coinage the most.

Four: Changes in collecting practices from the internet.  This is on-going and an example is (noticeably) reduced set collecting.

On 7/10/2022 at 4:15 PM, GoldFinger1969 said:

I owned RDS before....the European/British oils are too henpecked by the Greens overseas.  Both RDS and BP cut their dividends in 2020....Exxon and Chevron did not.

Royal Dutch had last cut the divvy almost 80 years ago during WW II during The Blitz.  They threw that all away.

I also think that RDS and BP have too much debt.  RDS is "modest" by current standards (at round 50% D/E) but not historically.  I consider both balance sheets weak.

On another note, I've also read that the Rockefeller family has been or is reducing their stakes in the Standard Oil successor firms for similar reasons, political correctness.  With the massive dividends they have been collecting for multiple decades, they should be amply diversified already.