World Colonial

1 hour ago, GoldFinger1969 said:

What would be very interesting would be to focus on modern coins graded by the TPG's today vs. 30 years ago.  I see everyone chasing PF70s and DCAMs and other label designations.  That seems to be where the growth is on Ebay and at coins hows, even if the "oldtimers" like Heritage and Stacks do very little with that stuff.

Certainly, these bulk submission orders I always read about with the TPGs are not for Wheat Pennies !

Well, it's easy enough to confirm my prior post is "directionally" accurate simply by looking at the TPG population data.  This especially applies to US, China, Canada, Australia and to some extent South Africa (silver KR) NCLT.

In the 1960's, probably at least 90% of the US collector base collected at least one of the circulating designs as their primary series, though maybe in noticeably lower proportion at any "meaningful" premium to FV.

Today, maybe 70% to 80% do (a total guess) but it has to be noticeably lower given what has happened to the prices of most coins in these series since 2008.

Several decades from now?  Probably 50% or even less due to new coins that don't exist yet (probably mostly new NCLT again) and a changing demographic composition where a noticeable proportion has little if any affinity for this coinage.  

1 minute ago, GoldFinger1969 said:

I think the time frame is key there.  The U.S. Coin Market -- as measured by the PCGS 3000 index but also prices for big categories of the Top 10 most popular coin types -- are very erratic price-wise.  You have a few bubbles punctuated by massive drops, retracements, and very few years of slowly rising prices.

This is just my opinion....based on demographics.....and that as you had the 1st wave of post-WWII collectors start to pass on (die) in the last 10-15 years or so....their common coin collections (SLQs, Barbergs, Franklins, Wheats, etc.) found much fewer buyers than would be the case 30-50 years ago.  Maybe the TOTAL number of coin collectors is up or flat from 50 or 65 years ago, I dunno.  But many of today's collectors are into moderns or bullion or quasi-bullion, etc.

So....you get tons of medium-quality or even high-quality (but not ULTRA-HIGH quality) coins hitting the market....nobody really wants them even at a "good" price based on The Red Book...and hence you have a "stealth bear market" where the price a few years ago (or maybe as of today) suddenly falls 30-50% from 5-10 years ago.

That's why aside from the occasional take-a-flyer on a high-graded low-denomination coin post-1900 (or post-1945), I pretty much stick to bullion or bullion numismatics, like MSDs, Saints, and Libertys.

My reply wasn't in the context you indicate.  What I meant is that with thousands of series and hundreds of thousands of coins (country, series, date, denomination), no one can possibly know what exactly is worth more or less, except in low proportion.

The evidence demonstrates that the  US classic series you listed have lost "share of wallet" predominantly to the ASE and world NCLT first and somewhat to world coinage and ancients second, not US moderns.  This coinage either didn't exist previously (NCLT) or wasn't readily available (world and ancients).

No one can know what more than a very low fraction of world "moderns" are generally worth either, given that at least tens of thousands qualify under practically any definition.  This is both now and over any time period, since limited price history is available and catalog list bears no relation to reality.

19 hours ago, kbbpll said:

Most of this banter back and forth centers on the perspective of "investment", which makes sense given the "markets strong amid global crisis" title. However, we are missing the perspective of collectors like me. I do not purchase coins as an investment. It is entirely, 100%, disposable income. I have zero interest in making money on it. It's a hobby. Am I stupid with my disposable income? I try not to be, but when I am, because I really want a particular coin and pay a bit more than I should for it, it's no different than $20 a month on a Netflix subscription I rarely use, or my wife spending $45 a month on a health club she can no longer go to. It's disposable income. I have never sold a coin. I never intend to sell a coin. If I really needed the money, I'd take whatever I can get for the coins in order to have the money. I'm not going to calculate what I might have gained or lost from the expenditure. Any loss is outweighed by the dollar value of my enjoyment. (Put my enjoyment value into a historical chart, and you'll see my many market bubbles). My heirs get to have some free money. Could I have "invested" the money and made my heirs wealthier? Sure, but then it wouldn't be disposable income, would it? If my disposable income plummets, so does everyone else's, so does the price of coins, and I can therefore purchase the same relative amount of hobby enjoyment factor. That's not good news for people in this to make money, but an awful lot of us aren't.

It varies with the coins bought.

Those who buy common pre-1933 gold and generic Morgan Dollars are almost certainly place financial considerations first.  The coins are too common for the likely size of the collector base.

The lower priced coinage (such as for the amounts you used) are presumably predominantly an alternative to other consumption expenditures.  

The rest I believe are a combination of both.  It just depends upon their attitude toward collecting.  The primary thing that leads me to believe that financial considerations are more important than your post seems to indicate is because I almost never read how wonderful the stagnant or declining US price level is since approximately 2008.  I read the opposite.

It's anecdotal but given what most collectors are buying, I see no reason to believe that more than a low percentage are treating any "material" outlay (a subjective concept I admit) as a predominant consumption expense.

One post here seemed to imply that I view my collecting predominantly financially.  If I did, I'd have a much lower outlay in my collection or woudn't be a collector at all, as I consider coins to be a poorly performing "investment".  But then, I don't buy the types of coins most collectors do either.

23 hours ago, cladking said:

And oddly enough US and world moderns have become the only coins still increasing in value other than "trophy coins".  

Only?  How can you possibly know that?

1 minute ago, RWB said:

When the unnecessary "grading" and postage and assorted valueless fees are subtracted, one gets closer to a meaningful collector value. Unfortunately, modern collectors have become completely dependent and will die from the "collectors' cancer" before they give it up.

I substantially share this sentiment.

Earlier here and on another coin forum, I expressed the opinion that most post-1933 US coinage will sell for less than the grading fee but what I left out here is that I expect it to apply in grades up to MS-66.

This coinage is very to extremely common in this quality measured by TPG grade.  Most of it (at least 95% even prior to SQ) is almost certainly an R-1 (1250+) with the many later silver dates (such as 1955-1964 quarters) possibly having at least 10,000.  This last group was hoarded in mass by the roll and a noticeable supply never even circulated.

Currently, most of this coinage sells for more than the grading fee in MS-66 but that is only because it isn't worth the bother of getting graded.  If most of the current supply was in a TPG MS-66 holder today, practically all R-1 (and R-2) would be selling for less right now even before prices decline any further.

This is also somewhat true for many 1933 and earlier dates in (somewhat) lower grades.

2 minutes ago, RWB said:

Some of the gold ancient coins in Heritage's CSNS are worth the drive and dive.

I looked at the selection and I agree with you.  In world coinage though the limited selection is quite striking.  I didn't look at everything but there it's particularly noticeable in Latin America which is where I pay the most attention.  Nothing where I remotely have any interest.  British coinage is still quite good.

3 hours ago, GoldFinger1969 said:

WorldC, when a penny or nickel or dime trades for $20 let alone $200 (or egads, $2,000 !!) that's alot more fluff and mumismatic premium than you find in most gold coins.  Same thing with MSD's.  So even though coin prices corrected in those smaller denominatons, I still think you could have trouble down the road.

Most people got into those sets as kids -- I guess -- because starting off collecting them was easy and cheap.  Not many 10-year olds can start out with Saint-Gaudens or Liberty Double Eagles.

For me, my Saints and Liberty's are a numismatic, artistic, and bullion-inspired investment.  

I agree with you. 

Perhaps I misunderstood prior post but what you just wrote was the primary point of my last post by referring to the PCGS indices.  I didn't mention Morgan dollars but I expect its financial performance to be quite poor also.  Main thing going for it is the next metals bull market.This should attract money to it (as usual) but I still think the premiums will decrease noticeably.  Otherwise, the premiums especially on the most common dates are inflated given how incredibly common these coins are.  The most common ones should be worth modest premiums to spot up to low to mid MS grades.

17 minutes ago, kbbpll said:

One thing I note about the coin market is that I've gotten more special offers on items in my watch list over the past few days than I've ever gotten. Granted I do not typically have a lot of watched items. I swear the one I just got a special offer on has been in my watch list for at least 6 months. I'll also note that what I look for is typically very narrow in scope, and I have not seen any big uptick in coins being offered for sale, so from that standpoint I don't see a big rush of collectors trying to cash out. Again, within a very narrow range (1899-1905 dimes).

There won't be a rush to sell the more preferred coins unless there is extended financial duress.  Most who can afford to keep what they have would rather do so than offer it at "fire sale" prices.

I did notice that the upcoming Heritage Central States world coin auction has a much smaller selection than normal.  It's about 1200 lots versus 3000 to 4000 generally.  I don't know if this due to collectors holding back or for those outside the US, not being able to consign the coin due to postal delays.

51 minutes ago, GoldFinger1969 said:

I'm not sure there is alot of fluff in various coins.....the air went out of their bubble a few years ago (i.e., Franklins).  I can't speak for EVERY type coin, and bullion (silver and gold coins) will also track the underlying PMs, but I don't see vulnerability akin to 1980, 1989, or 2007 pricing.

You have looked at charts of various PCGS indices right?  A lot lower than 1989 but still way higher than prior to that.

There is a huge amount of "hot air" in the price level, especially the US market.  Some of it is due to currency debasement (everything has gone up) but most of it is due to the financialization of the "hobby" from TPG and the buying of coins as "investments".

Someone might get the idea from consensus sentiment that prices are predominantly due to actual interest in collecting.  I don't buy it for a minute.  To believe this is to concurrently believe that collectors experienced a collective epiphany starting in the 1970's where they miraculously came to believe that what they collect is a lot more interesting than their predecessors did.  Why would anyone believe that? 

Some of it is due to financialization attracting more affluent buyers who can afford to ignore larger potential losses but there is no reason to believe this applies generally.  This is evident from the numismatic press and forum posts where the stagnant or declining price level since at least 2008 is perceived negatively instead of an opportunity to stretch your budget further.  Going by what we can see, the latter is a distinct minority view.

As to the future, depends upon what coins someone has in mind.  Common pre-1933 US gold has the spot price as a floor but no reason to expect it to sell for noticeably higher premiums given how common.  I still expect most coins to sell for (noticeably) less adjusted for price changes versus now.  The most common US coins (basically practically everything post 1933) I expect to overwhelmingly sell for less than the grading fee decades from now.  Most scarce or rare (actual or imagined) coins, still a lot less.  Most coins aren't interesting enough to most collectors if they are or face the prospect of losing noticeable value, especially in an era of declining affluence.

I can't know whether nominal prices will be lower or much lower decades from now since there might be much higher inflation.  I consider it a virtual certainty most will lose noticeable value adjusted for price changes.

49 minutes ago, GoldFinger1969 said:

What is or isn't...my 1987 recollection or my forecast ?

My forecast may or may not pan out -- it's a guestimate -- but my information on the 1987 Crash is bullet-proof, trust me.  I had just entered the business and every hour of every day from the August peak is fresh in my mind.  And I have the actual newsletters and financial clipping still saved to this day.

What you said about 1987.  That's the most common explanation I read but it's a rationalization, not a cause.  Apparently, I have contributed to the derailment of this thread enough already but the conventionally held view of cause and effect (such as the one you gave) doesn't actually explain anything.  

If you want me to explain it in a PM, I can do so.

17 hours ago, GoldFinger1969 said:

1987 Crash was caused by the drop in the dollar the previous week....talk of repealing M&A favorable policies on interest deductability...and a rising bond yield that made stocks very un-attractive.  When the market fell apart 6 weeks ago, you could get 1.5% on a 10-year Treasury bond.  In early-October 1987, you could get over 9%.

Markets discount the worst, then look for positive stuff like a FALL in claims (whenever) or a cutback in oil production (whenever).  Doesn't have to be "real" -- it can be a rumour or a Tweet.

No, that's what is commonly believed but not accurate.

16 hours ago, RWB said:

When researching the US Proof Coins 1836-1942 book, there was a conspicuous drop in auction prices for most (not all) coins over the previous 20 years. (This was in reported dollars, adjusted for inflation.) Data summaries are in the book.

It will be a lot worse under anything close to similar circumstances in the future.  The price level is vastly inflated versus the past.

1 hour ago, Revenant said:

Guess I'll take your word for it. I was 3 when the 1980s ended.

People always say it's different this time. I think it's even a meme now.

It's different until it's not. You can pretend you're flying until you hit the ground.

I guess we'll all see who is right in the fullness of time. For what it's worth, I'd love for you to be right. WC and I don't want this to be a bubble. We don't want a collapse or systemic failure, but I think it will happen.

Correct..  

I would like to see the financial markets become more a lot more reasonably priced without the economic damage, but that isn't an option.  The fake prosperity which the global economy experiences today and at least the prior few decades cannot survive the end of the bubble.

31 minutes ago, GoldFinger1969 said:

This isn't systemic failure.  It's a natural catastrophe -- like an asteroid hitting a city.  2008-09 was systemic.

The economic and financial damage isn't caused by the virus, YET. 

What we see now is a psychologically triggered political response to the pandemic.  In the past, this event would have been allowed to run its course, regardless of the human consequences.  Society is better organized now to respond to it due to much improved communication and increased economic resources but this doesn't change the psychological component.  There have been several recent pandemics (SARS and Swine Flu) where the scientific establishment didn't know the potential danger beforehand.  Nothing close to the current response was even attempted.

I'll grant you that if a large meteor actually hit the earth, I would agree it is the direct cause.  Short of that, it's always psychological.  Go compare this event to prior history and look at what happened in the financial markets.  Sometimes there is a correlation and sometimes there isn't.  But even when there is, it's not proportionate to the event.

9/11 triggered a mini-crash.  The 1987 crash which was noticeably bigger wasn't associated with anything.  No one has been able to find a "reason"  Many excuses have been made up but that exactly what it is.  The 2011 (or 2013) "flash crash" had no external event associated with it.  External events don't explain October 28 and 29, 1929.  If I showed you a chart which included Pearl Harbor day without the dates and possibly even with a price reference, you might not be able to identify it.  (The Dow fell 3% to 107 bottoming at 92 on December 28, 1942.)  If you could identify it,. almost no one else can.  The Mutually Assured Destruction (MAD) threat didn't disappear with the end of the Cold War.  People just aren't afraid of it but Russia still has enough TNT to blow the US off the face of the earth.  When the psychological mood is ready for it, the fear will reappear since the weapons certainly aren't going away..

More recently this past Thursday, the weekly jobless claim of 6MM was DOUBLE "expectations" and the worst ever, yet the market action ignored it with the Dow rallying 3%+,  The rationalization was the supposed pending agreement to cut oil output by 10-15MM barrels but that was (and is) just a rumor which Russia later denied anyway.,  Trump just made it up.  There was no actual "reason" other than psychological, just as is always the case.

Believing in an external cause is the biggest fallacy in financial markets.  It's the optimism or pessimism of financial market participants.

3 minutes ago, Revenant said:

I don't get into negative interest rates and bond maturities because they just don't make sense. I don't know how it happened. I can't get my brain around why someone would ever buy a negative yielding bond and not just keep cash. 0.1% from BoA is still better than -0.5%. It makes no sense to buy a bond that will not mature until after you're dead. None whatsoever. It doesn't really make sense to me to buy any bond with a maturity of longer than 5 years unless the bond is explicitly for making something with a useful life / service life of more than 5 years. And, yet, it happens. I still can't figure out why a Toyota dealership let me buy a new car 4 years ago with no money down and a 0% interest rate - makes no sense, but they did it.

My explanation is moral hazard and in part, financial intermediation. 

Governments create the moral hazard which gives institutional buyers (I don't think it is individuals except very occasionally) the motivation to do so.

Financial intermediation because those who are making the decisions to buy these overpriced and low quality assets are mostly doing it with someone else's money.

There is diversification but if financial market participants didn't feel safe buying it, they would act differently.  This is what has changed mostly starting in 1982.  It turned into a full blown mania around 1999 and has been one ever since.

11 minutes ago, Revenant said:

Well, you're free to think that but I'd disagree. I don't know how the next few years and the next 10-20 years will play out but the debt levels in our society are completely insane and they just keep going up. Interest rates getting up to 1.5% percent starts to become problematic when 5-6% is historically normal because people and companies are in too much debt. Interest rates can't rise because if they rise then bonds become more attractive then high P/E stocks and the stocks start to crash. They can't rise because home prices are too high and if interest rates go up the home prices have to come down for mortgages to be affordable. We have 25 year olds with $125,000 in student debt that can't be cleared through bankruptcy because they had to make it that way because these kids are bankrupt and if they could declare bankruptcy all of them would as soon as they graduated because they are bankrupt by definition...

At some point something is going to break, and when that happens a lot of other things are going to break.

You did a better job of being more concise than I was in my post below yours.

What you are describing about the interplay of debt levels and interest rates is dead on.  This is the best evidence of the approaching "end game".  If interest rates rise noticeably now but still to lower rates than previously, the whole world will become insolvent.  It won't be evident immediately with developed country sovereign debt but none of these countries will have much leeway because exploding interest payments will eventually consume most and then the entire current budget.  It's a function of the debt maturity schedule and future deficits. 

Same concept applies to corporate credits, as many won't be in immediate trouble now because of extended maturities but eventually, rising interest payments will eat into earnings on the way up juts as it was a benefit on the way down.

And to be clear if I was not, I don't think things are going to "fall apart" now and or in the next few years either, even though I expect economic conditions to be very poor.  I think the US and other developed governments probably have enough leeway to borrow and "print" a lot more first.

I am predicting though that most people are going to be poorer or a lot poorer later than they are now.  No one can do anything about that.

2 minutes ago, GoldFinger1969 said:

Good post, WorldC, but my only quibble is there was no bubble at the market peak on Feb 19th or whenever it was.  Valuations were not cheap, but they were not anywhere near prior "bubble" levels.

Where did you get that and which market are you talking about?

If you are talking about the US (or any) stock market, there are many indicators.  The most commonly used is the P/E ratio which is one of the worst and always has been  The P/E ratio using "forward" earnings is even worse.  Just exaggerate earnings forecasts and then adjust it downward with few remembering.  (It's all about earnings management and expectations.)

P/E is also one of the worst because earnings aren't even real money but an accounting number.  (Anyone who doesn't believe me can try to spend it at the grocery store.)  It's an estimate based upon management's application of existing accounting standards which change over time and aren't consistent between the US and elsewhere.  (Wasn't consistent elsewhere until the introduction of IFRS either.)  Change the accounting standards or how it is applied and earnings changes drastically, even though the economic position of the company doesn't change at all.  (Both change regularly.)

It's also a bubble because earnings and the P/E ratio are inflated in multiple ways versus the past.  First, artificially low interest rates have inflated profits through lower interest expense.  Second, it's enabled massive stock buybacks since 2012 ($4.5 trillion according to one source).  Third, it has inflated sales by enabling customers to buy more than they otherwise could afford.  Increase in real GDP since 2009 is mostly or entirely the result of incremental deficit spending versus 2007 and prior.  That's why it's fake and unsustainable.

The three that I consider best are the price/sales ratio, market value to GDP, and dividend yield.  All three were at or near record levels. Market value to GDP was 80% at the 1929 peak and I think 140% recently.  It's somewhat distorted due to international trade but price/sales which accounts for it isn't much if any better.  Warren Buffet seems to think the MV to GDP is relevant if that makes a difference.

The dividend yield in the DJIA at the September 3, 1929 top was 2.89%.  The DJIA fell form 381 to 41 on July 8, 1932.  As I write this post, the yield on the DIA ETF (couldn't find one for the index directly) is also 2.89% after a 29% decline.  I think it was 1.6% at the January 2000 peak but prior to the late 1990's, only below 3% just before the 1987 crash.

I prefer the dividend yield because it's a real number.  Dividends can either be paid or not.  Many don't or at least didn't care about dividends but earnings are either paid out as dividends or reflected in the equity section of the balance sheet.  Almost no one (literally) cares about corporate equity either, except during 2008 and now when most companies are at risk of becoming insolvent.  The rest of the time , it's leverage up frequently as much as possible including stock buybacks with debt.  If few or most don't care about dividends and hardly anyone cares about book value, why would these people care about earnings either?

The financial environment since 2000 has been priced to excess versus 1929 or any other period practically the entire time.  I'm not just referring to US stocks but global debt and real estate since these three are the largest and most important.  Not all stock markets, real estate markets or debt markets are the most overpriced recently or at the same time versus the past, but collectively it's an accurate representation of what existed at the 2/19 peak. 

This is most evident in the ridiculously low yields on the majority of debt, no matter what currency you are talking about or the lack of creditworthiness of the borrower.  Recently, there has been $11 to 17 trillion of sovereign negative yielding debt, even though the credit quality of these countries must be the worst since at least since WWII if not earlier.  There is also 100 year (relatively common recently) and in one instance 1000 year (Austria) bond maturity, at fixed rates.  (Argentina issued 100 year debt right a few years ago after exiting the IMF program and is defaulting again.  Shocking that happened since it's only the 8th time they have done that.)  )  There is "covenant lite" (in other words, practically no covenants) corporate debt which is even worse than pre-GFC.  Despite the 2008 mortgage debacle, mortgage standards since can't be called anything other than lax, versus the actually restrictive standards of the past.  Practically anyone who can fog a mirror can get a large credit line on a credit card.  (My sister did shortly after filing bankruptcy even in 2011.)  Auto finance allows you to roll negative equity into your next loan.  See what I mean?

So when I tell you this is the biggest bubble of all-time, there is a reason for it, in the aggregate.

3 hours ago, cladking said:

I've been watching the markets since the '50's.  Not as closely as you but one thing I'm pretty sure of is that almost all movement is noise.  It's possible the current drop is signalling a recession or the possibility of severe economic trouble ahead but if you look from a broader and longer term perspective even a depression would be little more than noise.  There are far greater concerns that are driving the markets and will drive the market over the next generation than anything the corona virus might do.  Even now the market isn't responding to the issue at hand so much as our reactions to it.  

I don't know what gold and silver will do either but they were headed higher before this all started and nothing occurring now will change this equation other than an economic collapse.  Even here a very sudden onset inflationary depression could be the form it takes.  

What existed at the February 19 peak was the top of the biggest bubble in the history of civilization.  It's the same bubble which never ended in 2000 and 2007.  Most people don't see it because they have no idea what a bubble environment actually looks like.

Working at home I have had CNBC on and so many professional economists, market analysts and money managers act as if the current financial circumstances are similar to prior declines, like 1987 or even 1973-1974.  It's somewhat similar to 2007 but the distortions which existed then never ended and have only been made worse in the last 12 years.

The economy (here and most elsewhere) is ill equipped to handle a depression.  Most Americans are flat broke and a lot less self sufficient than the 1930's.  Distorting the pricing of risk (monetary policy) and spending money out of an empty pocket (fiscal policy) doesn't come without costs.  Demand has been pulled forward for decades through increased borrowing and "kicking the can down the road" again will ultimately only make it worse.  The long run is going to be irrelevant to most people as they experience declining or crashing living standards. 

To believe otherwise not only contradicts economics and common sense, but physics.  It's a belief in something for nothing.

Here are two financial indicators to look for that will probably give the best indication it's about to get much worse.  First, interest rates on US and/or other developed world sovereign debt increasing "noticeably" despite central bank QE.  Second, the exchange value of the USD or other major currencies taking a dive.  When either of those happens, there will be nothing central governments or central banks can do to prevent much lower living standards.

I expect it to get a lot worse elsewhere (all or parts of the EU, Japan, China, or UK) before it happens here.

3 hours ago, cladking said:

This better than about anything shows our disparate attitudes about collecting and the nature of the interplay among supply and demand. 

Demand isn't created by the willingness to buy a share of stock at $50; it is manifested thereby.  First someone has to believe the stock is "rare enough" to be worth $50.  They have to believe the stock has sufficient growth potential or dividend rates or some intangible that makes it a good deal or a good store of value.  

People who don't collect coins will never plunk down more than face value or bullion value.  It's the interest in coins that turns otherwise normal people into coin collectors.  

One of the primary points of our disagreement is that you keep on insisting that the non-collecting public has a much greater propensity to collect than the evidence demonstrates.

Of course demand is partly contingent upon willingness to buy but no, I never said it has anything to do with buying common stocks.  Where did you get that from any of my posts?

Those who aren't collectors now in the United States overwhelmingly know the hobby exists.  If your claim is correct, why aren't a multiple collecting now regardless of the format (face value or otherwise)?  The only answer is because they don't want to.  Being stuck at home under a shelter in place isn't going to change hardly anyone's attitude toward collecting.

3 minutes ago, GoldFinger1969 said:

Gold has held up much better than in 2008-09.  Then it declined 25% peak-to-trough.  So far, the decline was closer to 10% and it's bounced back to retrace most of those losses.

My recollection is gold fell a lot more than that.  It bottomed at $680 but I don't remember where it peaked.  Pretty sure it was over $1000.  Silver fell from around $21 in May, 2008 to $8.39 in October, 2008.

It hasn't fallen as much yet because the selling has almost certainly just started, in all assets.  If you are not aware of it, this is the fastest decline of this size in this amount of time in history, literally.  Faster than the 1987 crash, 1929 and even the English South Sea Bubble.  It took each of those occurrences about 55 days for the initial crash.  (To the exact day for both 1929 and 1987.)  This one took 33 days, from February 19 to March 23rd.

5 minutes ago, Revenant said:

To the extent that it happens, now and in the future, I think it's mostly going to be current issue coins from circulation / that you get from the bank in rolls, bags and boxes. I agree completely that you're not going to see a lot of people trying to build albums of circulated or mint state mercs by going to shows and dealers and online shopping.

There is and will be some of that.  Sales of mint and proof sets have collapsed over the last few decades but there are still large numbers of circulating coins being sold in bags and boxes.  I noticed this when I checked the sales records in the last month or so.  When enough people need the money badly enough, I expect huge numbers of this coinage to get dumped into circulation which will make it easy to find high quality examples at FV.

3 minutes ago, Revenant said:

They may not be "the next thing," they may not be "the future," and they may not be "investments," but I wouldn't count them out completely yet.

When I came back to collecting in my early 20s after years away / at school in 2006 one of the first things I did was try to fill some albums / folders up by buying lots of wheat pennies and searching coin rolls I got from the bank. It was fun - in some ways more enjoyable than the registry. There was a taste of childhood in it - I used to look at change with my mother and check dates while we rolled them up to take to the bank. I fully intend to try that with Ben when he gets a little older - He just needs to know his numbers a little better first.

I'm not saying no one does it now or will in the future.  I know they do and presumably many still do now.

What I am saying is that, as a recreational activity, it isn't anywhere near as competitive now and in the recent past as it used to be.  There aren't ever going to be millions of new collectors coming into the hobby collecting in this manner due to limited disposable income.  I don't know what the number is now, but whatever the number, it is going to be (a lot) lower later than it is now.

The overwhelming percentage of people who did or might have done this in the past will just do something else.  There are plenty of other activities (like wasting time on smart phones or the internet) available for free that provide a lot more variety.

To most, this is almost certainly even less appealing with (set) collecting which isn't at FV, like the IHC example I gave in my prior post.  You either buy it at a noticeable percentage spread from a B&M (if one is even available in your area). Or, pay almost as much or even more for the shipping as for the coin buying it on eBay.  Then when you go to sell, either no one wants it or you get a very low fraction of the amount you paid.  It's affordable as a recreational activity but it's evident far fewer find it sufficiently interesting or else more would choose it.

9 minutes ago, Revenant said:

I was quite shocked by the hit that Gold and Silver spot prices took (at least in the paper contracts market, premiums for physical are insane at the moment) and by how much some of the major, established Gold mining stocks took a hit even as the FED was cutting rates to zero and announcing massive stimulus and the government was announcing massive new deficit spending. I probably shouldn't have been and felt silly for being shocked afterwards. Everyone is so levered up on average and there was so much panic selling around the middle of the month. The last crash hit in 2008 and it took 3 years for the metals to power to the peak, after initially declining. Nice to know we're consistent.

I wasn't.  Gold is one of the most liquid assets which is one reason it was heavily sold.  Silver somewhat less but it's irrelevant to the financial system since the market size is immaterial.  I see a lot more of that to come which is one reason I am bearish on it for the short to intermediate term.

As for mining stocks, I haven't paid attention to it in a long time but it's not a viable substitute for the physical metal.  My recollection is other than in the 1970's, this sector has been a horrible investment. Even when the spot price has been rising I don't recall it performing that great.  Some of the individual stocks have presumably done very well being a leveraged play on one or both but in general, anyone would have been a lot better off just buying other stocks because that's how I recall this sector behaves anyway.  Owning a mining stock is just owning another piece of paper.

3 minutes ago, Revenant said:

True! But you could see an up-tick in interest in Whitman and Dansco Albums. And I suppose there's always the QVC suckers.

 

Maybe, but that is not the future.  It is the past in the sense that this type of collecting must have peaked years ago, just as with sales of US mint and proof sets.

I bought my first Red Book in 1977.  I don't have it anymore but if I did, I'm fairly confident that the value of many lower grade coins is less now than then.  Other than eBay, I presume you can buy this stuff from dealer "junk bins" but paying more than it's worth.

As one example, I remember buying an IHC for 95c in 1977.  This was the VG Red Book price at the time.  With "gradeflation", it might be a "fine" but I've seen coins in this series sell for less than $1 in similar quality on eBay on the few occasions I have checked.

The coinage collectors used to buy to fill albums and folders in the past exists in huge number and it must be a lot less marketable.  It also isn't nearly as interesting to (prospective) collectors since it has to compete with so much more due to the internet.

3 hours ago, GoldFinger1969 said:

Well-said.  The only knock-on effect I can envision is people getting into gold bullion (and maybe silver bullion) and then finding out about gold coins like Saints and Liberty DE's (and maybe if into silver taking up MSDs).

But you'd need a seismic change in attitudes and the investing environment for PMs like happened in the 1970's.

I'm positive on metal prices longer term but I don't think the decline from the 2011 peak for both is over.  I expect both to sell for noticeably less first before going much higher.

What you are describing about collectors crossing over from bullion buyers presumably has been happening for a long time, starting in relatively large numbers in the 1970's and then accelerating in the 80's and 90's with TPG and widespread issuance of NCLT.

However, I don't believe these buyers have an interest in "real" collecting to anywhere near the same extent as those who buy other coins.  It's also a negative for the general price level because they presumably mostly bypass this coinage completely.

Rather than non-collectors getting into coins due to insufficient recreational alternatives, there is likely to be a lot more forced selling in the future by those who desperately need cash.  Not only will most collectors not be able and willing to pay current or higher prices, they are going to find out how much more common practically all coins are than they believed.  The supply is higher or a lot higher than they think.

As an example, I was looking at the 1790 Austrian Netherlands Insurrection TPG data yesterday.  I own six of the eight in MS-63 to MS-65, excluding the 3 florin and 14 florin.  The crown sized 3 florin has a current count of 42 in MS-60 or better and 24 more in AU-55 or AU-58.  (Mintage is reportedly 44,000.)  The more common of the two florins has 18 MS right now.  This isn't particularly scarcer for this type of coin and the supply is almost certainly noticeably larger.  The 3F and 14F seem to have held value so far, the others all seem to be worth noticeably less.