World Colonial

I agree. The one clarification I would add though is that TPG has brought in a lot more money into coins for the reasons you gave which inflates the price level and increases the importance to more buyers of viewing it as an "investment" because of the greater financial risk. This wasn't as clear to me in the letter but I agree with you on this also. I haven't read any claims and in my limited observations haven't seen any indication that metals run-up up to 2011 and more recently has had much of impact on the price level.

Of course he was not. But I also don't believe it is just directed at the "whales" because while the coins are individually expensive, there aren't enough to make a material difference financially. If you add up the estimated value of all the US coins listed in the PCGS "Million Dollar Club", It's the equivalent of a handful to very low number of the most expensive paintings. What kind of financial scale is that? It’s not even feasible if the inference is limited to the relatively low number of most elite (US) coins. If will never last more than temporarily, as this coinage would be uncompetitive versus similarly priced objects in other areas, such as paintings and Faberge Eggs. None of these coins are interesting enough to the non-collector where they will pay about the same price or a lot more. Here is the bottom line. The idea that there will ever be any financially meaningful scale with coins doesn't have any merit. With US coinage, the amounts are meaningful to individual predominantly middle class collectors but not to the ultra wealthy, much less in the context of global financial flows. It's even more extreme with world coinage and this is what I told those in South Africa. On one occasion a few years ago, I provided a detailed estimate of the value of all "investment" eligible ZAR and Union coinage (their "classics") which was about $30MM to $50MM. Why would any really wealthy individual or asset manager want to place any meaningful amount in such a shallow and illiquid asset, whether in US coinage and definitely not anywhere else? The answer is that they don't and won't. We already have the 1980's TPG bubble in the US as a direct example and a similar thing happened when TPG financialized "collecting" in South Africa. I observed it in real time and told participants there it wasn't sustainable and the reason it wasn't and isn't is because of what I wrote here earlier. There can never be any meaningful financial scale without turning collecting into “widget” trading. Even individual collectors such as Simpson and Partrick can noticeably inflate the price of most US series if they don’t “cash out” but instead buy something else, as there is no market depth. (The largest scale is in generic pre-1933 gold, Morgan dollars and NCLT. The 1904 double eagle alone has more liquidity than all other series.) It’s much easier to take an equivalent financial position in CLCT (holding company for PCGS) than most US series and it’s a lower tier small cap stock. Same would be true of Heritage if it were a public company and maybe Certified Collectibles Group (parent of NGC).

This is really funny. Your exaggerated claims bear no relation to how collectors actually collect yet you tell me this? None of your claims will ever happen and your posts demonstrate that yuu understand virtually nothing about what motivates collector behaviour. I read what MS wrote. The only thing he described are the characteristics of a hyper financialized market where coins are traded as "widgets". That's what claiming coins are a viable alternative asset class and fractional ownership represents. What does this have to do with collecting?

Yes, this is how you once told me that there is no "shortage" of coins where collectors will endlessly go down the "food chain" to buy what they can still afford. Supposedly, if collectors can't afford to buy what they do now or in the past, they will buy something with a much lower preference as a replacement. The only reason you hold this view is because you don't understand collector motivation at all. It's evident in our prior exchanges. Collectors never acted as you claimed in the past, they don't act this way now, and I have never read one post of yours where you provided any reason to believe they will in the future. No one is excluding anyone not now and not in 1999, anymore than they are "avoiding" the coinage you like most. There have been plenty of new collectors since 1999. This claim is unsubstantiated. Most of these new collectors just didn't and don't prefer the coinage you think they should. This is the internet age where anyone can collect anonymously and needn't care what anyone thinks of their collecting, which they mostly never did anyway other than how it impacts the price.

Good luck with that. I can easily explain why the level of financialization expressed in the letter is never going to happen. But given what a hugely inflated opinion you have of the appeal of coin collecting to the noncollecting population where you project such inflated prices for the coins you like, I can see why you would believe otherwise.

A couple of points to the above post. Since prices are set at the margin, a low proportion of primarily US collectors can still make the TPG pricing structure applicable elsewhere, even contrary to the preferences of everyone else. This has already happened with some of the best world coinage, fortunately just almost never with the equivalent price spreads of US coinage. Whether and where TPG will predominate in additional markets is mostly a function of US buyer preferences and the local collecting culture. South Africa is a small market (probably ranked between #20 and #30 in financial scale) but a test case of what happens where a disproportionate percentage of financially motivated buyers with little to no interest in collecting dominate. The price level is still higher (for now) but undoubtedly, the "hobby" has been negatively impacted by those who lost noticeable proportion of their investment during the bubble.

Also to be clear, I wasn't criticizing the letter per the earlier above post. I was pointing out that what MS wrote has nothing to do with collecting, at all. I find the letter exaggerated and substantially wishful thinking of what the US coin industry (for lack of a better term) fervently wishes will happen but that's another consideration entirely. It's no different than the predominant sentiments I read from South African "collectors" after TPG inflated that price level until it crashed and burned.

If you are substantially motivated by money in your collecting like so many US collectors especially on both this forum and PCGS, obviously you will be in favor of increased financialization. I am not but you are free to prefer otherwise. Whether you choose to keep your coin in the holder or not, TPG has still inflated the price level. No one can deny that it has brought in a large pool of financially motivated buyers into the US coin market. The inflated price of US coinage isn't an issue for me because I do not collect any US coinage. But one reason I made this decision back in 1998 when I resumed collecting is because I couldn't afford hardly anything I considered worth buying and bought something else. Obviously, like anyone else I would prefer to sell my coins for more than less when I sell it but TPG also inflates the price of what I want to buy just as it helps at sale. Since I am a collector and never started collecting with a profit motive, I would rathe pay less. I did make good money off of my South Africa collection but the only reason I changed to what I collect now is because of what I wrote here, the inflated price level for financialization created by TPG.

By attempting to make TPG prevalent in other countries, just as it is in the United States. It's my opinion most of the demand for TPG for world coins is driven by US collectors but the TPG have also opened submission centers around the world. Not sure where you are from but at this point going by the population data, it's predominantly accepted in South Africa (a market I know very well though don't live there), China and maybe Canada. With Canada, I suspect (but don't know) it's substantially US collectors driving TPG preference but this is an assumption only, as there is a local service. Also somewhat in Australia (mostly NCLT but somewhat in predecimal) and South Korea, though once again, I can't tell you whether most of the submitters are US based or not. Particularly what's been happening since the internet made most coins available is that US collectors are shifting somewhat (a low proportion to this point but noticeable) to world coinage and world NCLT from US coinage. For some (though not necessarily most) they can't afford what they want from US coinage, so they buy the better coins from other countries and while they are at it, inflate the price level noticeably due to the limited supply and use of the Sheldon scale. Due to so much "investing" in the US market, the US has an outsized percentage of affluent buyers (versus elsewhere) who are used to paying a lot more because US coins are so much more expensive. So they run up the prices of the coins elsewhere where traditional collectors either cannot or choose not to compete, leaving them to buy the "leftovers" from the most desirable coinage. (This isn't true of developed country markets but is most everywhere else.) Local collectors may choose not to compete because there is no market locally at US prices and contrary to this article, coins are not financial widgets which can be sold as easily but must frequently be shipped for sale to the US to get a US price. The good news is that this financialization ultimately will fail because these inflated prices are conditioned on first, the existing credit mania (which will ultimately collapse) and second, there can never be any scale in most countries where TPG will be widely accepted anyway. US collectors may succeed in turning collecting into "widget" trading for the most desirable world coinage but most collectors aren't going to waste their limited collecting budgets submitting predominantly low value coinage because it makes no sense.

This letter summarizes everything that is wrong with modern coin "collecting" in the US. What he describes is financialization, not actual collecting and which isn't remotely anything to celebrate by actual collectors, as it has nothing to do with collecting at all. Don't believe me? Look at the terms he uses, like fractional ownership and sight unseen buying. What is being described in this letter will ultimately reduce the popularity by driving hobbyist collectors out of the hobby, something which I believe has already happened but might not be fully evident yet due to the hugely inflated price level which has attracted a noticeable proportion of financially motivated buyers. For my entire life, there has been an outlier price level in US coinage. The TPG are attempting to replicate the US "collecting" culture elsewhere which is a detriment to actual hobbyists by making the coins they want to buy less affordable. The only reason this culture is possible is due to the concurrent unprecedented asset bubble which has inflated the price of all major asset classes, of which coins and other mass produced collectibles definitely are not included and never will be. Coins will never be a viable alternative to other assets on any scale because only actual hobbyists derive any utility from collecting, not financial buyers exaggerating the merits trading it as an alternative to stocks, bonds and other commodity type asset classes.

$50 back in 1889? That was a lot of money for the time, especially for a ocin.

I wasn't aware of your situation. I read your two posts here in the context of a prior exchange we had in another thread where you stated that you consider it preferable that certain coins (at minimum) should be available for public benefit. That's fine, depending upon how it happens. The core of the Smithsonian's US collection came from the US Mint Cabinet. Potentially, some of these coins would not have survived but concurrently, most of this collection and the British Museum's aren't available for public viewing. Both are so large with inadequate display space that most of it is stored where no one sees it. When I visited the British Museum in early 2000, almost no coins were displayed yet years later I read they have one of the largest in the world. Now the ANS, I'll agree they provide public benefit but that's because for an administrative fee, it's available for research. I would like to view their holdings for the area I collect at some point. I have thought that if don't end up giving mine to someone I know, I'd donate it to them.

There is a difference between being "preoccupied" and the inference in both of his posts which is nonsensical. It's like being a collector yet not having a collection is simultaneously equivalent. This is an oxymoron. Someone can be a numismatist while owning no coins but to claim you are a collector while either not owning any coins or even having an interest in ownership is a contradiction. What kind of "collecting" is that? To go back to the post where I made the comment on SDB, I can see why someone may choose to not use a SDB because they want continuous access but that is another matter entirely. Lastly, like many other collectors, I have aspirations and goals related to my collection but concurrently, if I never bought or owned another coin in my life, I'd get over it and survive. I can find other interests and I certainly don't "invest" in coins.

Why do you own any coins then?

No, another US Mint product of no interest to me. If I don't see it on a coin forum, I'll eventually see it on Coin Week's site.

If I shared your view, I wouldn't be a collector. I am a collector because I want to own the coins. I am mostly interested in my collection precisely because it is mine, not someone else's. This doesn't mean that I have to own every coin I like or want to buy, whether in my series or otherwise. There are many coins (even in my series) that I have not bought since I intentionally limit myself to collect below my financial means. However, if I found viewing coins (whether in museums, online, at shows or at dealers) a satisfactory substitute to ownership, I'd quit collecting, as there is no point to it. To your example of a museum, when I visited, I mostly ignored the limited coin displays because the other objects are actually a lot more interesting and I'm never going to own those objects. Viewing those objects in museums is interesting precisely because I can't own it but I don't see hardly any coin this way, especially using the exaggerated criteria of significance used by US collecting.

I have the best part of my collection in a SDB. Prudent risk management financially and in my case, I would actually never be able to replace many of the coins I own in anything close to the quality I have. I would prefer to keep my collection where i have continuous access to it but don't have a home where I can do that.

This thread reminds me of my correct decision to decline participation in such a fake competition.

Is this a theory or is there any actual verifiable evidence to support it? This sounds like yet another example where scientists and historians pretend to know and claim things that are only conjecture or have no realistic probability of ever being confirmed. The first one sounds somewhat plausible to me, as it would explain why ancient cultures originally held gold in high esteem, despite it's limited practical usefulness. The second one...never mind.

Not that I consider it often accurate, but PCGS Coin Facts estimates contradict this thinking also. Even though some coins in the highest grades have been resubmitted multiple times, there is still a large gap between the estimates and the populations, often or most of the time. The best example I can think of is the 1802 half dime where the combined population is 14, excluding any PCGS "details" (which if any aren't available for viewing) and including duplicates (3 NGC AU-50?). The estimate is 35-40 and it's my understanding someone purportedly compiled an itemized census about 75 years ago. So while some could have been lost, shouldn't be close to that many. Previously in a Coin Week article, Jeff Garrett made a similar claim though he wasn't specific. He's been around for a long time and presumably has more direct knowledge than most but Harvey Stack contradicted him by responding to the article. As many coins and large collections as Garret has seen, I think Stack is right. He's presumably seen more.

What you are describing is tied to the current asset mania. When the financial levitation act ends, nothing is going to be spared. Higher gold and silver prices did little if anything to lift coin prices at the 2011 peaks. It doesn't appear to be any different this time. Among the more affluent, except those who happen to have much or most of their money in privately held small to medium businesses or commercial real estate, the current environment isn't noticeably reducing their spending power. For the rest, it mostly depends if they are still employed. Based upon where the job losses have mostly occurred at least until a few months ago, I don't think collectors who work in those industries were bidding in auctions anyway; mostly lower income to "working class". More recently, I am hearing of large scale (planned) playoffs among "white collar" professionals. If true, this will eventually make a difference. The reason coin prices did not crash during the GFC in 2008 is because the financial duress was temporary.

It depends upon the coin. Have you seen the 2013 Canada $50 Dimond Jubilee commemorative? It's the one replicating a painting showing the queen seated in one of her residences holding a scepter. The obverse is the Gillick portrait. I actually like that one. I agree with you on the basketball coin though, more junk.

Doesn't seem like a strong price to me looking at prior sales in the listing.

I can give you many reasons why neither non-collectors nor non-US collectors are going to buy it. If it was anything other than a virtually zero probability random event, the price level would reflect it. The first is that the overwhelming proportion (wealthy or not) have never even heard of these coins. Contrary to what US collectors believe, neither are that prominent, except to US coin collectors. Outside of coin collectors, maybe a few percent who can afford either have both heard of it and remember anything about it. Generically, you could ask any random number of Americans (never mind from elsewhere) and except for collectors, it’s possible none will even know dollars were minted in 1794. You could ask different questions to elicit the same answer and they still won’t know. They don’t care because the coin or numismatics is irrelevant to them. They would only possibly know of either coin from exposure to the mountain of trivial facts dumped on them continuously through the internet. Except for US coin collectors, those who study early US history, economic historians and maybe potential “Jeopardy” participants are the only others with a motive to know anything about these two coins. Are the most affluent US collectors familiar with the thousands of equally or more prominent art objects and other collectibles? Do they know most of these objects exist either? The answer is obviously not, either at all or only in very low proportion, since most of them don’t know much if anything about the most prominent world and ancient coins.

I have read your similar posts before. My inference is that what you describe is mostly limited to the Northeast. Higher population density of families who have lived in the area for a long time. Most of the rest of the country seems to have a much larger proportion of short termers. Some interesting stuff for a local small town (?) auction.