World Colonial

1 hour ago, GoldFinger1969 said:

Rigged Market = One That Won't Do What I Want It To Do 

 

That pretty much sums it up.

Best I can deduce, a portion of the "metal bugs" have concluded that because what is actually mostly credit expansion which they call "printing" doesn't result in their expected outcome, it has to be manipulation.  After all, they cannot possibly be wrong, so there has to be some dastardly conspiracy which has cheated them out of their deserved windfall.

The current gold price doesn't make any difference either.  Gold has increased what,  40 fold since 1971 when convertibility was suspended?  It isn't remotely cheap versus other commodities (historically overpriced) and not cheap versus hardly anything else either, but it still makes sense that silver should be equally overpriced.  The gold-silver ratio must conform to the 16-1 historical ratio (arbitrarily set by government) and failure to do so is also a sign of manipulation.

1 hour ago, GoldFinger1969 said:

Anybody who thinks that banks are speculating long or short on precious metals prices with the Fed, OCC, Treasury, FDIC, and state regulators all looking at them.....

I don't know what these agencies would say about it as I have not talked to anyone responsible for direct supervision at one of these firms and they aren't allowed to discuss specifics anyway.

What was generally reported when the financial system nearly blew up in 2008, these firms had all kinds of garbage on their balance sheets.  "Level 2" and "level 3" assets which I would classify as less liquid and mostly riskier than any equally leveraged position in futures.  I doubt it's much better now.

IMO, the regulators are attempting to keep the financial system from falling apart but equally more interested in hiding the true financial condition of "troubled institutions" than telling the public the truth.

Ultimately, they are going to fail as moral hazard cannot successfully be regulated forever.

On 4/14/2021 at 11:52 PM, cladking said:

It is imperative to do the opposite what everyone else does especially in a panic.   

In this case as silver is diverted from the supply chain and prices escalate refineries will start backing up and converting thousands of years of coinage into 1000 OZ bars.  There's enough of this metal to eventually stop the run up in price which will be followed by a collapse.   The silver exists but isn't available at the current price.  

I agree with you here, with the qualifications I added in my prior replies. 

For one, there would be more supply if the spread wasn't an insane 20% to 25% right now.  If someone buys, they have to hold as if they don't, they might as well incinerate their savings.  The risk reward proposition as a retail buyer isn't that great due to the buy-sell spread.  This is presumably the primary reason most opt to buy the "paper" metal.

On 4/14/2021 at 11:08 PM, Quintus Arrius said:

The truth is far more complex. The news media have a story for every uptick and downtick and more often than not contradict themselves. Ask someone, anyone, to explain the run-up in gold and twenty-five people (especially the eternal optimists stricken with the gold bug) will give you twenty-five different answers. There are too many variables to consider: industrial demand, speculative demand, political instability, interest rates, finite resources, etc.  

The very same experts who insist precious metals will skyrocket imminently cannot tell you what tomorrow's winning three-digit lottery number will be, why the Martingale system in roulette is unsustainable and who this year's Triple Crown winner will be.

It's psychology, not the cause-effect most claim to believe.

On 4/14/2021 at 11:43 PM, cladking said:

The markets are rigged and no market is more rigged than silver.  So long as the status quo is maintained the bankers can make the silver price dance to their tune.  

Take a look at the relative value of silver versus other things.  Is it really that cheap compared to houses? Cars? A barrel of oil?  Most things people have to buy?

I have been hearing the "manipulation" claim for several decades.  If it were actually true and it was that underpriced, there shouldn't be now and should not have been at any time a single ounce to be bought.  That's what happens in a freely traded market with price control attempts.

There has been nothing stopping anyone (including "metal bugs") from buying up every available ounce on the open market to force the "paper" price much higher.  Why didn't it happen?  The logical explanation is that these people are irrelevant as the buyer of last resort.

On 4/14/2021 at 11:43 PM, cladking said:

Now the situation is people want metal and are finding no sellers.  This will result in metal being diverted from industry to fill this demand by means of increasing numbers of contracts standing for delivery.   

One reason there aren't many sellers is because physical silver is a lot less liquid than it typically has been.  The current liquidity is absolutely terrible.  The spreads (in dollars) are unprecedented. 

The supply would certainly increase somewhat if physical buyers (like coin dealers) would raise their bids somewhat which they should be able to do since retail demand is supposed to be so strong .  That's what normally happens in any actually liquid market.  Not sure why they have not, unless they don't or can't hedge effectively.  And if they don't, hedge a big price decline through a wider bid-ask spread.

On 4/14/2021 at 11:43 PM, cladking said:

Indeed, with BoA and many shorts all competing with industrial users and the general public to obtain silver there is a buying panic of biblical proportions on the horizon.  

To my knowledge, financial institutions aren't necessarily shorting for their own account.  They are mostly acting as an intermediary.  Some of the short interest (in any commodity) is producers selling their production forward.  There is nothing nefarious in short interest.  By definition, for every short, there has to be a long.  Nobody can take a long or short position without someone taking the other side of the trade.  Increased short interest does not automatically suppress the price.

On 4/14/2021 at 4:07 PM, Quintus Arrius said:

For those of us who are neither investors nor collectors but essentially rudderless accumulators, this news is of no consequence.  I have some silver.  I have some gold.  I am only curious to know what member World Colonial makes of all this as his rather direct insights both alarm and delight in matter-of-fact, take-it-or-leave-it, but open-to-suggestion fashion.  I commend Zebo for bringing this to our attention. 

Nothing the upcoming end of the financial asset levitation act won't resolve on the supply side.  I have admitted that I have been wrong on the timing on the never ending financial mania many times but it's coming because there is no free lunch in life.

I expect enough metal accumulators to turn into forced sellers later.  It's not like most metal advocates have much economic staying power.  (They are mostly weak hands.  Middle class with limited savings and dependent upon their job and artificially cheap credit.)  What I do not know is whether there is going to be another 1980 or 2011 spike first.

As for much higher inflation, that's what practically everybody expects.  To this ;point, the decision to "print" by central banks since 2008 and more recently provide "helicopter money" with "stimulus" has been a painless one.  Economic illiterates (most of the public and the brain dead politicians they elect) seem to believe they have found the perpetual "money tree".  As for economists, central bankers and the financial community, I'm not sure what most of them believe.  Most of them seem to be dumb enough to believe it to but maybe they aren't and act like it out of expediency.

My expectation?  When the current path doesn't seem free anymore, my prediction remains the same.  Those with the most influence will choose to preserve their own wealth and maintain the empire by throwing most of the public "under the bus". They aren't about to "print to infinity" out of misplaced altruism or if the public wants it.

12 hours ago, GoldFinger1969 said:

Not really.....we got pestered all the time by some clients to admit him so they could probably invest with him through the Private Bank.  We had 3 guys with MBAs scouting them and then the PMs like me (with CFAs) reviewing that.

Ultimately, we couldn't figure out HOW Madoff made his money (is he buying small caps or large caps ?  We needed to know) and he had no succession plan, with only him managing the entiere account (what happens if he gets hit by a bus ?  Who takes over ?).

Had we even elected to take him on, I have to think that him self-clearing would have been a huge red flag.  That's the tell-tale signal of a fraud.  You always want your statements/trades to be done under the supervision of a big Wall Street firm like JP Morgan Chase or Morgan Stanley or Goldman Sachs. 

They are on the hook then if there's any fraud.

I was being sarcastic.

When someone is running a Ponzi scheme, no succession plan required.  No segregation of duties either and you don't take vacations so someone else can look at the records.

4 hours ago, GoldFinger1969 said:

My firm actually vetted managers and we had Madoff on our list.  We never used him.

That was close

9 minutes ago, cladking said:

It should be noted that WC doesn't consider an increase from $2 to $100 "financially meaningful".  I suppose he would be right if you had only one such coin.   

No, I do not.  

1 minute ago, cladking said:

Possibly.  It's not that such a large percentage has been sent in as it is that a large percentage of what's left will never be sent in because they are corroding.  

My assumption is the TPG data represents a low to very low fraction of what currently exists in this quality.  There is limited "positive selection bias" for the highest TPG grades but decreasing with the price level.  I hold the same opinion for the overwhelming majority of low priced coinage.  How much will ever be submitted and when is another thing altogether.  

7 minutes ago, cladking said:

Every date and mint mark is different.  But there are no massive hoards.  Nobody had access to enough coins to search and most of the best coins came from mint sets.  I've watched the distribution and movements on mint sets for many years.  I especially paid attention to buyers and wholesalers.   

I don't believe there are massive hoards either.  But I do believe that more of these coins are out there than is evident in your posts and more will be in higher quality than you seem to believe.  By higher quality, not referring to large numbers of what is currently an MS-67 or MS-68 but 66.

10 minutes ago, Quintus Arrius said:

[In the absence of the OP, I wonder if it would be bad form for a spectator to jump in, and say:  Back on Track...

I do not wish to be presumptuous, but what interested observers would really like to know is what each of the primary combatants here, World Colonial and CladKing (as of late) would offer as an example of a specific coin or coin series he regards as notably undervalued, in the usual ordinary sense of the word as reflected in the earliest posts on this thread.]

None that I can identify in advance, especially where it is financially meaningful.  Back in 2004, I thought South Africa Union and ZAR were and I was correct but could never buy in volume.  I made good money but it wasn't material as an "investment".

Most US coins are dependent upon the broader market.  I don't consider any series meaningfully "undervalued" where it makes any financial difference.  No series to my knowledge has overtaken another in 45+ years since I have been a collector, or even prior.  Noticeable movement in specific dates though.

As for world and ancients, someone can luck out like I did but the demand for most is too shallow to have any predictable pricing.

Just now, cladking said:

No.  The definition stays the same.  Most modern coins that aren't degraded or traded principally wholesale are in collections assembled wholesale over many years.  Most of the owners of these sets are inactive.  and often were never very serious collectors.  Paying $9.99 for a tubed set of BU memorials back in the '80's hardly makes one a "collector".  Setting aside a few rolls of 1976 bicentennial halves and never looking at them does not define a collector.   

In the many years at a coin shop I don't recall ever seeing a set of Kennedys come in.    I saw some rolls and very few accumulations but no sets either incomplete or complete.  I saw lots of silver sets.   Hundreds of indians.  

 

Where are all these sets you believe exist hiding?  

Look at the TPG data.  4,000+ 1971-D Kennedy's and thousands for many, many other dates.  Seriously, do you really believe this is most of the supply in this quality?  Who do you think owns most of these coins?  Is it really mostly non-collectors buying it from coin TV shows?

I understand your point but it's a mistake to conclude that anyone sees is representative.

I'm not referring to collections above a certain arbitrary value.  Obviously by this metric, there are fewer.  There are plenty of active collectors where these sets are a sideline collection.  You know some of them from coin forums.

Depending upon the criteria, there may be more IHC collectors but not Bust Half.  As a series, it's far too expensive for the vast majority of the collector base even in lower grades.

7 minutes ago, cladking said:

Most collectors are just taking all these markets for granted because there are those like you telling them everything is "common".  1976 BU quarters are common.  AU 1973 quarters are unavailable at virtually any price and this wouldn't change even the price went up many fold.  They are all gone just like many other moderns that were never set aside because no one wanted them and everyone assumed they were too common.

Why would anyone want to buy an AU 1973 quarter when better ones are so easy to buy?

What you are implying will only be relevant if your assumptions turn out to be correct.  There is a difference between "some price increase" and your prior claims.

3 minutes ago, cladking said:

I believe this collapse is caused by two primary factors.  One is that prices have increased substantially.  It was one thing to buy a 1971 proof  set for $2.10 but it's entirely different to pay $32 for a 2021 half a century later.  

I agree with this but in constant prices, the difference isn't nearly as large and the sets have more coins now.

5 minutes ago, cladking said:

The second factor is probably even more important and that is few people really wanted the sets back in the old days.  They were purchased to stay current with collections they weren't even working and because they were the o0nly coins available from the mint.  Many people wanted a set but they bought five to flip for a quick profit.  Most of these extra sets just languished after they were a couple years old and everyone who wanted one had one.  The sets often sold for less than face value so many ended up in cash registers or hauled off to the bank.  Millions have been busted up to make date and mint mark sets for the public.   

I agree with this also, with the caveat that the internet also made it a lot less appealing.

6 minutes ago, GoldFinger1969 said:

What are we talking about for these coins in the pop census:  what's the TOTAL number of coins available and what is available in MINT STATE (MS60 and up) and also GEM MS (65 and up) ?

I would have to add it up and it's too much trouble.  Almost none are below MS and a minority below MS-65 but I agree with cladking these aren't necessarily "gem".

The more important point is that the vast majority of this coinage as a date/MM already has hundreds to several thousand in MS-66 with most in MS-65 and MS-66.  My position is that 95%+ of these coins even dated prior to SQ are actually a Judd R-1 in MS-66 with 1250+.  He has never disputed this to my recollection, only that it is common.

12 minutes ago, GoldFinger1969 said:

How many collectors do you guys think we are talking about for these "moderns' ?  Thousands....tens of thousands ?  More ?

Depends upon your definition but it's more relevant by series than in total.  More for Lincoln cents and Ike dollars than most or all others pre-1999.

By my definition of "collector", if the US has 2MM, it has to be tens of thousands at least for each series but only a (very) low percentage pay any noticeable premium.

If my assumption that the (vast) majority have an annual budget less than $500 is reasonable and my 2MM is somewhat accurate, then most are buying low priced Mint products, low priced US classics, world coinage and this coinage.  That's all they can afford, exists in quantity, and it's possibly viewed as an alternate consumption expense.

The point of me citing the population data was to contradict your claim that "few" were saved.  Nothing to do with future demand.

1 hour ago, cladking said:

Kennedys have never been widely collected before like indian cents of bust halves.   

This coinage is more "widely" collected than both IHC and Bust halves, unless of course, you are now going to use another definition of "collector".

1 hour ago, cladking said:

What do you suppose would be the effect of these coins becoming widely collected?   

What exactly is this supposed to mean?

1 hour ago, cladking said:

You don't like inexpensive coins but there are hundreds of millions of collectors who can't plop down thousands or even hundreds of dollars for a coin. 

Totally and blatantly false.  I buy somewhat more expensive coins now versus the past but nothing to do with your claim.  I have bought and own many low priced coins.  I just disagree with you that it should be worth a lot more later.

1 hour ago, cladking said:

IWe ARE going to go from almost no collectors of '71 Kennedys to a much higher level.  I don't know how much higher but it will be higher.  Your beliefs about value and availability have no bearing on the facts.  

Well, it would be one thing if I actually claimed what you said, but I did not.  You just made it up, again.

Your claim of almost no collectors is also ridiculous.  Why do you think I bothered to comment on the TPG data?

1 hour ago, cladking said:

Your belief that a 1971 half will never be worth more than $1.15 is simply based on your assumptions.  I believe your assumptions are based not on trends or the way things are unfolding but on historic norms.  And then you seem to forget that historically every dog has its day and even if you think clads are dogs there will come a time (God knows when) that even these mutts will get attention.  

There you go making things up again.  I never claimed or implied what you wrote, ever.

Where I disagree is with your verbal gymnastics in this extract where you are implying the same ridiculous premises that will lead to your outlandish price forecasts.

1 hour ago, cladking said:

The "hobby" as you define it encompasses only those who collect "significant" coins and is tiny; even tinier than ANA membership or subscribers to the coin papers.  

You chose to infer this because you dislike my opinions.  In the past, I have repeatedly estimated a US "collector" base of 2MM, you have seen this in our post exchanges, and yet you write this anyway.  There isn't a single post where I either stated or implied this claim.

There is no absolute significance, just as there isn't for scarcity.  I disagree with your inference due to your prior inflated exaggeration.

It's also evident you don't read or ignore my posts when it has nothing to do with the coinage you like or it suits you.  On numerous occasions, I have discussed any number of coins where I disagree with consensus perception.  My posts where I did so are not hard to find, as I have commented on "classics" far more often than US moderns or the world coinage you call "modern".  Some of these posts are in this thread.

25 minutes ago, GoldFinger1969 said:

CK, depending on how you define "collector" the variation in demand can be HUGE.  If someone has 1 or 2 mint or proof sets and goes years or decades without even LOOKING at another coin purchase, I wouldn't call them a collector anymore than I am an art collector because I bought a few pieces decades ago.

We want people who are actively buying....spending $$$ yearly......bidding online....attending coin shows....visiting their LCS from time-to-time. 

I don't define collector by amount spent.  It's subjective but to me it's "active recurring interest", basically like you said.  We don't know who buys the (relatively) large volume of US Mint products every year or who owns the TPG populations.  I merely reasonably infer that, aside from where it's apparently evident it isn't, it's usually collectors.

With US mint and proof sets, I do assume there is some buying by non-collectors but the collapse in sales volume versus prior decades leads me to believe it's more reflective of actual collector demand.

20 minutes ago, cladking said:

What defines "modern" is nobody saved them.  Millions of '50-D nickels were saved but many modern nickels were saved in much smaller numbers.   All pre-1965 coins were saved but after this savings were very spotty.  Some Jeffersons were saved  in much larger numbers than the '50-D and some were very lightly saved.  

There has been no market for BU rolls so few were saved.  This especially applies to the clads.  

Go look at the TPG population data.  Have you ever even done that?  The counts in there for any low priced 20th century US coin are by any sensible assumption a low fraction of the number in existence.

You mean the TPG population data is fictional and all those "high" quality coins I see on eBay every time I look are just imaginary?

9 minutes ago, cladking said:

And you said; "Otherwise though, tons of this coinage dated 1933 and later was saved by the roll in (better) UNC grades;.."

This is just as untrue as when you said it in this thread on 4-5.  

 

Coins between 1933 and 1964 were heavily saved by any measure.  The quality of coinage was higher in this era and few collectors even bothered with getting the nicest coin.  They were all nice and Gems by the standards of the day were common enough.  Modern coinage was not only not saved but most of it is ugly.   Part of the reason it wasn't saved is that it was so ugly. 

Once again, you are looking for a reason to argue my posts just because you dislike what I write.  I already told you I was not specific.  This still doesn't contradict what I told you in my subsequent posts.

Next

21 minutes ago, GoldFinger1969 said:

I still think that overall the coin industry CAN get new followers into this hobby.  Especially because folks who want gold/silver naturally segue into coins (well, at least I did !!  ).  BitCoin and demographics remain a problem, I admit.

Yes, I agree that the metals do provide a recurring customer base which stamps and other mass produced collectibles do not.

The other factor not discussed at all is future economic conditions.  With a far above averaged size collector base and very inflated price level, this matter to US coinage a lot from an industry viewpoint.

There is a day of reckoning in store for the typical American's living standards.  It's been postponed far longer than I ever thought possible but it's coming.  When it arrives, there is no possibility the US price level with remain as inflated as it is now.

2 minutes ago, GoldFinger1969 said:

I find the back-and-forth debate informative, if a bit confusing at times to follow since I'm not well-versed in some of the coins you guys are referencing.  But thanks guys ! 

For those who joined late or those like me who need to stay-on-point....we're mostly talking post-1964 coins here, right (when silver got taken out) ?  Not the stuff from 1900-1950 or so (SLQs, Franklins, Barbers, and other small face value coinage), right ?

Yes, as usual when I exchange posts with him, it goes off on a meaningless tangent.  I'm equally at fault for that and will admit it now.  

Yes mostly, except for the cent which is 1959 and later and to me, Jefferson nickels which to me are all "modern".

1 hour ago, cladking said:

1971 half dollars in chBU are common.  By your standards exceedingly common.  

But the chief reason they are common is that very few people collect clad half dollars.  

One other point.  You do realize that NGC has graded 1,342 and PCGS 2,690 71-D half dollars, don't you?  

I also presume by common you actually mean low priced.

This is about 4,000 collectors to which must be added an unspecified (almost certainly large) multiple who won't spend the money on grading fees or won't pay for a graded coin.  I would hardly call this "few".

It's similar with any number of other US moderns.  I looked at the PCGS Population Report yesterday (since they have the higher market share) and there are any number of US moderns with thousands.  The 71-D Ike has about 13,000 at both services.  In the instances I reference, the counts are close to or higher than a noticeable minority of 1933-1964 US classics.  

From my limited review, the numbers are lowest for nickels, dimes and quarters but only up to the start of the SQ program.  Cents, halves and dollars are not low.

There are plenty of collectors for this coinage, just at nominal prices which is a different consideration entirely.

1 hour ago, cladking said:

I am merely saying that in the long run coins of similar scarcity and demand will have similar prices.  

I never disagreed.

1 hour ago, cladking said:

 Old classic coins have far far higher premiums than equally scarce moderns and this is a simple fact.  Many can be worth 100X as much or much more.  I don't have a problem with this but there is only ONE CAUSE of it; moderns have far far less demand.  

I never generally disagreed with this either.  Where I specifically disagree with you is that your definition of "scarcity" is meaningful to virtually anyone aside from you since it is blatantly obvious that it is not.

1 hour ago, cladking said:

 You can invent words to describe or name anything but the fact is many moderns are going up thousands fold not because they are "popular" like most old coins, but because they are very scarce and are getting attention for the very first time.  These are all simple facts, and you can't just destroy facts by taking a different perspective or assigning new words to describe them.  

I am inventing words?  All your primary claims I have disputed in our prior post exchanges have no relation to reality whatsoever yet you tell me this?

The primary reason currently high priced moderns are expensive is because the "hobby" has been financialized.  These aren't usually viewed as "investment" coinage but few will pay a high price without the expectation of getting most of their money back.  Financialization gives buyers a reason to believe they will, in the aggregate.  This also applies to common classics outside of the key dates which sold for high prices in the 60's. 

Collectors didn't suddenly wake up when TPG was introduced and experience a collective epiphany.  Without financialization, very few if any coins selling for "high" prices now which did not before would be worth anything close to current value.

The examples you are using are either condition census coins or specialization which are not the focus of my posts.  My posts have nothing to do with condition census coins, you know it doesn't, and yet you use this as a "rebuttal" anyway.

For specialization, I'm not referring to the coins which sell for high prices now, like the 1969-S/S cent.  There are very few of these but it has nothing to do with what I told you. I'm referring to the tens of thousands of others which are "rare" but sell for irrelevant prices because no one cares about this minutia. 

double post